A spoonful of pharma lowers sugar

We didn't know how best to deal with the pandemic. Should we all isolate ourselves forever (China), or die like flies first so survivors have immune protection (Boris Johnson), or inject ourselves with bleach (recommended by Donald Trump and the recent winner of the Austrian elections Herbert Kickl)? And then, in an incredibly short period of time, powerful vaccines were developed, ensuring that even if infected, the disease was no longer fatal.

Vaccines, a pharmaceutical feat of excellence, have not been universally welcomed, as we know. For some, bleach remained the preferred method of treatment, for others, death was a God-ordained necessity for the old and weak. For many, especially in developing countries, new vaccines were out of reach. Industrialized countries have accumulated them beyond their needs, ignoring death elsewhere and risking the possible emergence of more deadly mutations.

For pharmaceutical companies working overtime to develop an effective vaccine, it was a boom time when some of them found a viable solution. Aided by governments granting them high-speed certification and money by pre-purchasing unproven vaccines in large quantities, the winners printed money. Small, cutting-edge companies developing genetic technology solutions like Moderna and BioNTech have suddenly become the darlings of the stock market, eclipsing the blue-chip pharmaceutical giants. Pfizer, which decided to cooperate with BioNTech, raked in $100 billion in two years. The company suddenly looked like a hot startup.

For the Covid winners, the good times did not last. Moderna is now a loss-making company, with a market capitalization one-fifth ($20.8 billion) of its former glory (September 2021: $430 billion). BioNTech (24.5 billion euros) is worth a quarter compared to November 2021.

Covid vaccines are no longer bestsellers, and most gene technology companies working on more effective cancer treatments so far have little to show for it. BioNTech's recent clinical trial of a combined flu-Covid vaccine performed poorly. And Pfizer, which had spent all its earnings as well as its newly raised debt on dividends, stock buybacks and expensive acquisitions (it bought Seagen, a loss-making cancer biotech company, for $44 billion, among other indiscriminate investments) is back on earth. .

Pfizer shares are worth half their former prime price, with a current market capitalization of $165.6 billion. This recently made headlines when Starboard Value, an activist investor, purchased a billion worth of shares, demanding a “turnaround.” I am invested in Pfizer and therefore more than interested in better fortunes for the company. Unfortunately, as the FT's Robert Armstrong pointed out in a recent opinion piece, it's not exactly clear how to achieve this.

Covid windfalls are all being spent, hastily, if not wisely. This fact cannot be undone. To turn around the situation, the company sold various non-core businesses and implemented a cost-cutting program to reduce debt. This is more or less what any activist investor would have demanded.

No “new management” of the company, brought in by the activist, would now act in a different way. Reducing research or requiring divestment from Seagen, for example, is not a wise proposition. No one can predict with certainty how research projects will unfold in the future. Some bets will fail, others might succeed. No one could have predicted the explosive success of weight loss drugs like Wegovy, Ozempic or Zepbound.

Many active ingredients show promise in the laboratory and then fail in clinical trials-Andreas Weitzer