On Thursday, BMO Capital maintained its Outperform rating and $36.00 price target for Pfizer (NYSE:PFE) shares. The decision comes after the pharmaceutical giant announced the withdrawal of its sickle cell disease treatment, Oxbryta, from the market. The drug's distribution and clinical studies have been discontinued due to concerns that its overall benefit no longer outweighs the risk for patients, following an imbalance in vaso-occlusive crises and fatal events.
The move by Pfizer follows the European Medicines Agency's (EMA) unexpected call for a meeting to discuss a July 2024 referral concerning the drug. Pfizer had acquired Oxbryta as part of its $5.4 billion purchase of Global Blood Therapeutics (NASDAQ:GBT) in August 2022. While the withdrawal of Oxbryta may affect investor sentiment in the short term, Pfizer has indicated that this will not impact its financial guidance for the fiscal year 2024.
BMO Capital has adjusted its financial model for Pfizer by removing Oxbryta revenue projections. Despite this change, the firm's analysts believe that the impact on Pfizer's near-term financial performance will be minimal. The price target of $36.00 for Pfizer's stock remains unchanged, reflecting confidence in the company's overall business outlook and pipeline despite the recent setback with Oxbryta.
In other recent news, Pfizer Inc. (NYSE:PFE) is witnessing several developments. The company's global drug access initiative, "An Accord for a Healthier World," is progressing slower than expected. Launched in 2022, the program aims to provide affordable access to Pfizer's drug and vaccine portfolio to 45 low-income countries. However, as of now, only ten countries have joined the initiative. Despite the slower progress, Pfizer remains committed to the program and is in talks with an additional ten countries to join the accord.
In a significant development, Pfizer has voluntarily withdrawn its sickle cell disease therapy, Oxbryta, from all markets globally. The decision came after evaluating clinical data suggesting that the risks associated with the use of Oxbryta now outweigh its benefits. Despite the withdrawal, Pfizer has indicated that this will not impact its full-year 2024 financial guidance.
In the legal arena, Pfizer is facing multiple lawsuits related to the heartburn medication Zantac. A hung jury in Chicago marked the second trial where Boehringer Ingelheim, a marketer of Zantac, has not convinced a jury of the drug's safety. Pfizer, along with other marketers of Zantac, is facing tens of thousands of lawsuits claiming the drug is linked to cancer.
On the financial front, BMO Capital has maintained its Outperform rating on Pfizer shares following a series of investor meetings, reflecting confidence in the company's strategic direction and potential for future performance. However, Erste Group has downgraded Pfizer shares from "Buy" to "Hold" due to a drop in sales of COVID-19 related products and slower business growth.
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