Why Pfizer Stock Dropped
- Several pharmaceutical stocks fell yesterday due to litigation linked to safety concerns with Zantac, including Pfizer.
- After marketing it for a few years, the firm sold rights to an over-the-counter version of the heartburn drug in 2006.
- The bigger problem for Pfizer is the future demand for its COVID-19 products.
What’s going on with Pfizer stock
Pfizer stock dropped by 3.3% after the closing bell on Thursday. Concerns about litigation surrounding Zantac sparked the slide. The FDA ordered the heartburn medication to be discontinued from the market in 2020 owing to safety concerns. Ranitidine, a chemical linked to cancer in animals, is a component of Zantac. Bladder cancer, colon cancer, and prostate cancer are among the cancers linked to Zantac.
Why we care
GSK (NASDAQ:GSK) initially created Zantac, and it was the world’s best-selling medicine in 1988. For several years, Pfizer (NYSE:PFE) has marketed an over-the-counter version of Zantac. However, Sanofi (NASDAQ:SNY) acquired the OTC drug’s U.S. rights in 2006 and has not marketed it since then.
Pfizer does have some legal liabilities owing to the increased danger of cancer associated with Zantac use. Furthermore, because GSK and Sanofi sold Zantac for a longer time, they may be more susceptible than Pfizer. However, it’s too early to tell what the potential consequences will be for these firms.
There’s a far more crucial issue for investors concerning Pfizer’s involvement in the Zantac lawsuit. The demand for Pfizer’s COVID-19 vaccination, Comirnaty, and COVID-19 treatment, Paxlovid, is critical to its success. Together, these medicines accounted for almost all Pfizer’s second-quarter growth for 2022.
The expected release of boosters targeting the coronavirus omicron variant from Pfizer in a few months could be a catalyst. The Biden administration has also expressed concern over a possible severe COVID-19 outbreak this fall and winter. A fresh surge in cases might cause demand for Comirnaty and Paxlovid to rise. Additionally, Pfizer is developing a vaccine to prevent RSV which could be a windfall for them firm.