Skip to Content
Stock Analyst Update

A Fair Value Boost for Pfizer, Shares Attractive

Thanks to strong rare-disease drug data, we've edged up our fair value estimate on the drugmaker.


 Pfizer (PFE) reported positive phase 3 data for rare-disease drug tafamidis in transthyretin amyloid cardiomyopathy, or ATTR-CM, leading to an increase in our annual peak tafamidis projections to $2 billion from $750 million. This also increased our fair value estimate to $46 per share from $45. We continue to believe Pfizer is undervalued. We view the strong tafamidis results as a good example of Pfizer's maturing pipeline that will strengthen future cash flows and reinforce the company's wide moat.

Our peak tafamidis sales projections are based on strong efficacy, limited treatment options, and likely strong pricing power. The phase 3 data showed a 30% reduction in all-cause mortality, which should drive strong utilization of the drug and favorable reimbursement. While the prevalence of the disease is limited and estimated to be between 400,000 and 500,000 people (in developed markets, according to Pfizer), we believe the less than 1% diagnosis rate shows the likely difficulty in reaching these patients. However, without an approved drug for this patient population historically, we believe there was less motivation to diagnose the disease. Also, the more limited patient size combined with the strong efficacy should enable strong pricing of at least $150,000 annually even after accounting for value-based pricing, which rare-disease drugs have utilized. Overall, we project a 95% chance of approval based on the strong efficacy and benign side effect profile. Further, over the long term, we expect diagnosis rates to improve to 10% with tafamidis used in over a third of these patients.

While no other drug options are available for ATTR-CM, Alnylam's Onpattro is approved in another related rare disease, polyneuropathy of hereditary ATTR. The strong efficacy of Onpattro (50% decrease in all-cause hospitalization and mortality) may drive some off-label usage of the drug directly against tafamidis, but we expect this off-label competition to be limited.

Morningstar Premium Members gain exclusive access to our full analyst reports, including fair value estimates, bull and bear breakdowns, and risk analyses. Not a Premium Member? Get this and other reports immediately when you try Morningstar Premium free for 14 days.

Damien Conover does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.

Transparency is how we protect the integrity of our work and keep empowering investors to achieve their goals and dreams. And we have unwavering standards for how we keep that integrity intact, from our research and data to our policies on content and your personal data.

We’d like to share more about how we work and what drives our day-to-day business.

We sell different types of products and services to both investment professionals and individual investors. These products and services are usually sold through license agreements or subscriptions. Our investment management business generates asset-based fees, which are calculated as a percentage of assets under management. We also sell both admissions and sponsorship packages for our investment conferences and advertising on our websites and newsletters.

How we use your information depends on the product and service that you use and your relationship with us. We may use it to:

  • Verify your identity, personalize the content you receive, or create and administer your account.
  • Provide specific products and services to you, such as portfolio management or data aggregation.
  • Develop and improve features of our offerings.
  • Gear advertisements and other marketing efforts towards your interests.

To learn more about how we handle and protect your data, visit our privacy center.

Maintaining independence and editorial freedom is essential to our mission of empowering investor success. We provide a platform for our authors to report on investments fairly, accurately, and from the investor’s point of view. We also respect individual opinions––they represent the unvarnished thinking of our people and exacting analysis of our research processes. Our authors can publish views that we may or may not agree with, but they show their work, distinguish facts from opinions, and make sure their analysis is clear and in no way misleading or deceptive.

To further protect the integrity of our editorial content, we keep a strict separation between our sales teams and authors to remove any pressure or influence on our analyses and research.

Read our editorial policy to learn more about our process.