Pfizer (PFE) Stock Gaining on Rare Lung Disorder Treatment Approval

NEW YORK (TheStreet) -- Pfizer (PFE) shares are up by 0.90% to $34.75 in afternoon trading on Friday, after the company announced that the Food and Drug Administration granted regulatory approval for its lymphangioleiomyomatosis (LAM) treatment.

LAM is a rare lung disorder that mostly affects women with an occurrence rate between 2 and 5 people per million.

The treatment, Rapamune, originally received regulatory approval for preventing organ rejection in kidney transplant patients in 1999. The drug had global sales of $206 million in the 12 month period ended August 2014. 

Rapamune is the first FDA approved drug treatment for LAM.

"Pfizer is proud to gain approval for RAPAMUNE as the first treatment for patients with LAM, through our work with the FDA, the clinical investigation team and the LAM Foundation," said Rory O'Connor, MD, of Pfizer Inc. "This type of cooperative effort creates opportunities for innovation in developing therapies for patients with rare diseases." 

In separate news, Pfizer is one of the major biotech firms reportedly in talks to purchase French cancer drug maker Cellectis (CLLS), according to the Financial Times.

Pfizer currently owns a 9.5% stake in the company.

Separately, TheStreet Ratings team rates PFIZER INC as a Buy with a ratings score of A-. TheStreet Ratings Team has this to say about their recommendation:

"We rate PFIZER INC (PFE) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its solid stock price performance, largely solid financial position with reasonable debt levels by most measures, reasonable valuation levels, expanding profit margins and growth in earnings per share. We feel its strengths outweigh the fact that the company has had somewhat disappointing return on equity."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • The stock has risen over the past year as investors have generally rewarded the company for its earnings growth and other positive factors like the ones we have cited in this report. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
  • The current debt-to-equity ratio, 0.53, is low and is below the industry average, implying that there has been successful management of debt levels. To add to this, PFE has a quick ratio of 1.81, which demonstrates the ability of the company to cover short-term liquidity needs.
  • The gross profit margin for PFIZER INC is currently very high, coming in at 86.14%. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of 21.87% trails the industry average.
  • PFIZER INC has improved earnings per share by 8.6% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, PFIZER INC reported lower earnings of $1.42 versus $1.65 in the prior year. This year, the market expects an improvement in earnings ($2.03 versus $1.42).
  • You can view the full analysis from the report here: PFE Ratings Report

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