Algorithmic Market Check-Up: Pfizer

News about Pfizer’s (PFE) failed pursuit of AstraZenca dominated the headlines last month, however this premium biopharmaceutical company can still be an attractive investment. Growth over the past few years has been steady and the current balance sheet is salubrious, allowing the company to take advantage of new opportunities that arise. If this opportunity is not created through an acquisition, Pfizer’s new research center in Kendall Square, Cambridge, Massachusetts is experimenting with a new approach to conducting research, which may be just what the company needs.


The 280,000-foot facility will have open working spaces, and encourage sharing ideas with their academic and biotech neighbors. Senior vice president Jose-Carlos Gutiérrez-Ramos downplayed the risk of eavesdropping by competitors stating, “there are a few things – the chemical structure of a drug or the protein sequence of a therapeutic antibody – where we need to take precautions… However, those are only 10 percent of our activity. The other 90 percent can be shared.”

One of Pfizer’s biggest hurdles to overcome is its sheer size with a market value that exceeds $187 billion. In order for this massive conglomerate to grow, it must be able to consistently introduce multiple blockbuster drugs that generate sales of at least $1 billion or more. No doubt that this is a herculean task, but that’s exactly why Pfizer’s strategy is to make the research center that will collect some of the most brilliant minds in Cambridge including scientists from local universities, teaching hospitals, and biotech start-ups as well as patient advocates that are willing to advise and help fund research into some of today’s most debilitating diseases.

Pfizer will be filing for the accelerated approval of Palbociclib, a breast cancer drug; with estimated peak sales over $5 billion and can potentially get an early date with the United States Food and Drug Administration (FDA). The company will be filing accelerated approval based on strong phase 2 data. The drug is considered one of the most promising experimental breast cancer drugs in Pfizer’s arsenal today, and works by blocking a pair of enzymes known as cyclin-dependent kinases 4 and 6.

Goldman Sachs resumed coverage of PFE with a buy rating and a price target of $35 representing an approximate upside of 17% from the PFE’s current price. This price target is likely to be realized as our advanced self-learning algorithm based on predictive analytics has a strong bullish signal for the premium biopharmaceutical conglomerate. At I Know First, we endorse algorithmic trading through predictive analytics as one investment strategy that will help assuage risk and enhance returns.

While a deal with AstraZenca could not be reached, Pfizer has other prospects that shareholders can prosper from. With shares trading lower lately and PFE carrying an enticing dividend of 3.5% as well as diversified revenue streams with new prospective blockbuster drugs in the works, the downside is limited compared to the forecasted potential.

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