BreakingviewsCapital Calls: Pfizer’s vaccine windfall

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A vial labelled with the Pfizer-BioNTech coronavirus disease (COVID-19) vaccine is seen in this illustration picture taken March 19, 2021. REUTERS/Dado Ruvic/Illustration/File Photo

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GOOD FORTUNE. Pfizer’s (PFE.N) decision to partner with Germany’s BioNTech (22UAy.DE) to produce vaccines was a coup. First-quarter earnings on Tuesday showed the resulting bounty.

Pfizer now expects adjusted earnings to be nearly $21 billion this year, 40% more than what it would have earned without Covid-19 vaccine revenue. That leaves a big bottom-line windfall. Pfizer appears to have fewer side effects and be more effective than some vaccines read more , too, so further guidance increases are easy to imagine.

It could leave the company with a cash windfall, though. Perhaps caution is prudent, as the pandemic won’t be here forever. The company is upping spending on research and development as a result, particularly in the technology that underlies the vaccine. As demand wanes, it will need new products to refocus efforts.

Yet the need to provide boosters means some durable vaccine demand, according to Chief Executive Albert Bourla. That likely leaves enough left over for shareholders as a gesture of appreciation for the upfront funding of the pharmaceutical muscle against Covid. (By Robert Cyran)

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Earlier in Capital Calls:

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