Investment Rating - The report initiates coverage with a "Buy" rating and sets a target price of $36.16, indicating a potential upside of 48.0% from the current price of $24.43 [1][3][16]. Core Insights - Pfizer maintains a leading position in the global pharmaceutical industry, with robust growth in its non-COVID core business, projected to grow by 12% year-over-year in 2024. However, the company faces a significant patent expiration wave from 2025 to 2028, with seven blockbuster drugs losing patent protection [1][7][19]. - The company has implemented an aggressive cost-cutting plan aiming to save $7.2 billion from 2024 to 2027, which has already shown positive results, with operating margins expected to rise significantly [5][8][15]. - Pfizer's innovative pipeline is being restructured, with several promising products expected to drive long-term growth, including Elrexfio, SSGJ-707, and MET-097i, which are anticipated to contribute significantly to revenue by 2035 [9][10][11][15]. Financial Summary - Pfizer's revenue is projected to decline in 2025, 2026, and 2027 by 0.8%, 0.9%, and 5.8%, respectively, primarily due to the decrease in COVID-related product sales and the impact of patent expirations [2][15]. - The adjusted net profit for FY24 is estimated at $13.1 billion, reflecting a year-over-year growth of 87% [2]. - The adjusted PE ratio for 2025 is forecasted at 8.05, with a dividend yield of 7.1%, indicating an attractive valuation [16]. Pipeline and Growth Potential - Pfizer's pipeline includes several high-potential candidates, with expected combined revenues reaching $44.2 billion by 2035, representing 46% of total revenue [9][15]. - Key products in the pipeline include: - Elrexfio, targeting multiple myeloma, with significant clinical advantages over competitors [10]. - SSGJ-707, a PD-1/VEGF dual antibody, expected to become a cornerstone product in oncology [11][12]. - MET-097i, a GLP-1 receptor agonist, showing promising weight loss results with fewer dosage increments [13][15]. Market Position and Challenges - Pfizer's market leadership is supported by a comprehensive capability from research to commercialization, but it faces challenges from the expiration of patents and the impact of the Inflation Reduction Act (IRA) on drug pricing [18][21]. - The company is actively pursuing mergers and acquisitions to bolster its product pipeline and mitigate risks associated with patent expirations and declining sales from older products [23][29].

Core Viewpoint - The article discusses the impending "drug price storm" in the U.S. as President Trump announces an executive order to implement a "Most Favored Nation" policy aimed at reducing prescription drug prices by 30% to 80%, targeting the long-standing issue of high drug prices in the U.S. [1][2] Group 1: Policy Announcement - Trump plans to sign an executive order to lower U.S. prescription drug prices, aligning them with the lowest prices in other countries like Canada and Mexico [2][3] - The policy is expected to save the U.S. billions in healthcare costs and reduce the financial burden on citizens [2][3] - This is not the first attempt to address drug prices; a previous "Most Favored Nation" policy was halted by a federal court due to pharmaceutical industry pushback [2][3] Group 2: Current Drug Pricing Landscape - U.S. drug prices are significantly higher than those in other developed countries, with brand-name drugs costing an average of 4.22 times more than in other nations [4][5] - The average price of all drugs in the U.S. is 2.78 times that of 33 other OECD countries [4] - High drug prices are attributed to a lack of government regulation and the ability of pharmaceutical companies to set their own prices [4][5] Group 3: Industry Response - The pharmaceutical industry, represented by the PhRMA, opposes the government's pricing intervention, arguing it would harm patients and increase costs [7] - Industry estimates suggest that the "Most Favored Nation" policy could lead to over $1 trillion in losses for the pharmaceutical sector over the next decade [7] - Trump has criticized the pharmaceutical industry for shifting the burden of research and development costs onto American consumers [7]