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Earnings: Fresh Look into PFE’s Medicine Cabinet Tuesday

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October 31, 2016
Pharmaceutical company Pfizer investment advice and news.

Pfizer, the research-based global biopharmaceutical giant, is involved in a number of court cases, drug tests and FDA approval processes that Wall Street will likely want to hear more about when Q3 earnings are reported before the bell Tuesday.

Among the issues are progress reports on its therapies for HPV-positive head and neck cancer, Group B Streptococcus in newborns and renal cell carcinoma. Many analysts say they also will be listening for more insight into how PFE plans to distribute and market Inflectra, its biosimilar version of Johnson & Johnson’s (JNJ) blockbuster autoimmune rheumatoid-arthritis drug Remicade. PFE announced that it would introduce Inflectra, which has been the subject of heated court battles with JNJ, at the end of November at a retail price 15% lower than that of Remicade.

Also on analysts’ agendas is more information on the FDA’s recent approval to update product labeling for XTANDI capsules with data showing improvement in radiographic progression-free survival in patients with metastatic castration-resistant prostate cancer, according to published reports.

Analysts reporting to Thomson Reuters are projecting revenue to come in at $13.05 billion, with a per-share profit $0.62. The pharma giant has consistently outpaced Wall Street’s expectations, beating them 14 of the last 15 quarters.

Short-term options traders have priced in a potential share price move of 2.5% in either direction around the earnings release, according to the Market Maker Move™ indicator on the thinkorswim® platform from TD Ameritrade.

On the call side, there has been some notable buying activity at the Nov 33-strikes ; put buyers have focused on the monthly 32- and 31-strike prices. The implied volatility is at the 37th percentile. (Please remember past performance is no guarantee of future results.)

Note: Call options represent the right, but not the obligation, to buy the underlying security at a predetermined price over a set period of time. Put options represent the right, but not the obligation, to sell the underlying security at a predetermined price over a set period of time. 

PFE, 12m, 2015-16

FIGURE 1: SUMMER HEADACHE.

Shares of PFE have lost much of their gusto since peaking in late July, and are now off more than 1% on the year compared with the 7.1% gain on the S&P 500 (SPX).  PFE share are trading over 1.5% below their 200-day moving average. Chart source: thinkorswim® by TD Ameritrade.  Data source: Standard & Poor’s. Not a recommendation. For illustrative purposes only. Past performance does not guarantee future results.

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