Is Pfizer Stock A Buy Or A Sell On Its New Weight-Gain Approach?

Pfizer (PFE) stock is toeing its 50-day moving average in late September following enthusiasm for its new approach to helping cancer patients gain weight.

↑ X NOW PLAYING How Novo Nordisk, Wegovy And Ozempic Are Changing The Weight-Loss Game For Patients And Investors

The Big Pharma titan is testing a drug called ponsegromab in patients with cancer cachexia. In this condition, patients with cancer lose a significant amount of muscle and fat mass. The highest dose of ponsegromab helped patients gain an average 5.6% body weight over 12 weeks.

Patients also saw improvements in appetite, cachexia symptoms, physical activity and muscle mass.

The effort is vastly different than Pfizer's other weight-focused drug, danuglipron. Pfizer is testing that drug, which mimics the GLP-1 hormone, as an obesity treatment. The company is planning to send ponsegromab into registration-enabling studies in 2025. It's also currently working to find the right dose for danuglipron in weight loss.

On Sept. 9, Pfizer stock surged above its 50-day line. But the stock fell below that line on Sept. 25.

There are still challenges ahead. Pfizer and BioNTech (BNTX) are considering whether they need to reconfigure their Covid and flu combination vaccine. The shot generated a low number of antibodies capable of handling influenza B strains. Moderna (MRNA), on the other hand, is planning to file for approval of its combo shot later this year.

Is Pfizer stock a buy or a sell today?

Pfizer Stock Fundamentals

In the June quarter, Pfizer earned an adjusted 60 cents per share on $13.3 billion in sales. Both beat expectations. Earnings declined 11% while sales rose 3% operationally. It was the first quarter since December 2022 that sales increased year over year.

Sales of heart disease treatment Vyndaqel surged 71% to $1.32 billion and easily topped forecasts. Padcev, a cancer drug Pfizer acquired with Seagen, brought in $394 million in sales, coming in above projections for $352.6 million.

Revenue from the Covid vaccine Comirnaty plummeted and missed expectations. But Covid treatment Padcev topped the Street's call and soared 79%.

For the third quarter, analysts project 59 cents earnings per share and $14.98 billion in sales. Profit would reverse from a year-earlier loss and sales would climb more than 13%.

This year, Pfizer expects adjusted earnings of $2.45 to $2.65 a share and $59.5 billion to $62.5 billion in sales. At the midpoints, earnings would surge 39% as sales pop more than 4%.

Obesity Treatments In Focus

Investors have zeroed in on Pfizer's efforts in obesity treatment. The company says it plans to send danuglipron into additional testing. Danuglipron is a daily pill, compared to leading shots from Eli Lilly (LLY) and Novo Nordisk (NVO).

But Leerink Partners analyst David Risinger doesn't expect Pfizer to have effectiveness and safety test results until 2026. Danuglipron is one of three obesity treatment candidates Pfizer has in testing. The company has a similar drug that mimics GLP-1 — a hormone tied to satiety and stomach emptying — and a third with an undisclosed mechanism.

The field for oral weight-loss drugs is becoming increasingly crowded. Roche (RHHBY), Viking Therapeutics (VKTX), Structure Therapeutics (GPCR), AstraZeneca (AZN) and others are all in this space.

Pfizer Stock And Recent News

Outside of obesity treatment, Pfizer recently launched PfizerForAll, a digital platform to help people connect with health care providers for migraine, Covid or flu. It also connects people with vaccines for Covid, flu, respiratory syncytial virus and pneumonia.

The Food and Drug Administration also signed off on updated Covid vaccines from Pfizer and Moderna. These shots aim to block against the KP.2 strain and are recommended for people age 6 months and older.

Technical Analysis: PFE Stock Tops 50-Day Line

Pfizer stock dipped below its 50-day moving average on Sept. 25, and remains above its 200-day line. Shares are forming a new flat base with a buy point at 31.54, MarketSurge shows.

(Related: Keep tabs on chart patterns by visiting IBD's MarketSurge.)

Pfizer stock has an IBD Digital Composite Rating of 47 out of a best-possible 99. The CR is a measure of a stock's fundamental and technical measures. Shares also have a Relative Strength Rating of 38, a measure of 12-month performance.

Is PFE Stock A Buy Or A Sell?

Based on savvy rules of investing, Pfizer stock isn't a sell. But it also isn't currently a buy. Shares are still forming a flat base and have yet to break out. Bearishly, shares have fallen below their 50-day moving average.

Pfizer stock still has to prove its fundamental and technical merit.

The company is trying to shore up its pipeline to return to the growth it saw at the height of the pandemic. The RSV vaccine and a potential approval in obesity treatment could be key.

To find the best stocks to buy and watch, check out IBD Stock Lists. Make sure to also keep tabs on stocks to buy or sell.

Follow Allison Gatlin on Twitter at @IBD_AGatlin.

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