Although Pfizer‘s (NYSE: PFE) Following recent struggles with falling profits and an activist investor’s bid to overthrow its leadership, the pharmaceutical giant is still actively advancing its top priorities and giving investors plenty of reasons to consider buying its shares while they’re cheap.
With that in mind, here’s a new initiative worth thinking about if you’re wondering whether you should make an investment.
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On November 20, Pfizer announced that its strategic partnership with Flagship Pioneering, a highly regarded biopharmaceutical venture capital (VC) group, had agreed to a new collaboration.
Under the deal, one of Flagship’s portfolio companies, a privately held biotech called Ampersand Biomedicines, will work with Pfizer to potentially develop new obesity drugs. Given that the weight loss drug market could reach $100 billion by 2030, there is no doubt that there is great potential for these companies if they work together.
Ampersand’s technology platform aims to expedite the development of multicomponent drugs that can be precisely localized to the appropriate physiological locations in the patient’s body, perhaps including specific locations within specific cell types, and then deliver a high-impact payload. for the intended medication. effect.
Unlike technologies that are conceptually similar in terms of their targets, such as antibody-drug conjugates (ADCs), Ampersand’s technology can supposedly be implemented in a wide range of different therapeutic formats and drug delivery systems, using from small molecules to biological products and even nucleic acids such as mRNA.
In layman’s terms, this means that biotechnology could develop novel approaches to treating obesity, and that those novel approaches could end up being significantly more effective than drugs currently on the market or in development elsewhere.
But that is an ambitious goal. This is not to say that its highly flexible multi-format approach is impossible, but in practice it will need to address a number of engineering problems beyond what would normally be expected. The physical and chemical interactions between each drug format and each delivery system would need to be carefully calibrated from scratch, and doing so correctly even for a combination is a very complicated and challenging process.
Still, don’t be too pessimistic about the Ampersand-Pfizer collaboration. Both will have plenty of resources to work with, as well as access to much of the best intellectual property (IP) and the talent to develop many of the somewhat disparate biotechnologies in their repertoire. Additionally, the two companies have a huge amount of biological data to work with, which will undoubtedly improve their chances of success.
At the same time, there is no reason to rush into buying Pfizer shares on the basis of this new collaboration. There is no guarantee that Ampersand’s approach will lead to new drugs within the next five years or so, even with the help of Pfizer’s formidable research and development (R&D) resources and expert guidance. Currently, there is no indication that the pair will launch new clinical trials anytime soon.
This collaboration is just beginning and will likely involve a great deal of laboratory work as well as extensive preclinical testing that has likely not even been anticipated thus far. Even if they somehow started actual clinical trials relatively soon, the trials can fail or take years to fully conclude, so the prospects of anyone making money quickly on the basis of this collaboration are effectively nil.
That means that if Pfizer ever markets a drug derived from this collaboration, it will be very late to the obesity drug market. Therefore, it would need to produce a very potent and/or highly tolerable new drug if it wanted to secure a significant market share. So, be on the lookout for announcements about new anti-obesity drugs in the works. Until then, there isn’t much reason to update your investment thesis on Pfizer.
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Alex Carchidi has no position in any of the securities mentioned. The Motley Fool has positions and recommends Pfizer. The Motley Fool has a disclosure policy.
Is this a new reason to buy Pfizer shares at all costs? was originally published by The Motley Fool
