The pharmaceuticals industry has made huge strides forward in the last few years. Look at what MRNA has done. It’s allowed us to develop vaccines against the novel coronavirus in a previously unheard-of timeframe of less than one year.
Now a major pharma player has made a new acquisition a new space in order to continue diversifying their business.
Many investors might not think about cannabis when thinking about cutting-edge biotech, but that’s exactly where this Big Pharma industry leader is looking.
That’s why they recently agreed to pay some $6.7 billion for a company with a leading drug candidate that includes the use of cannabinoids.
And since we’re no ordinary investors, we know very well that overlooked opportunities like this one are often where the most impressive profits can be found.
I believe this merger shows exactly how the drug giant I have in mind for you today manages to stay on the leading edge of medical science.
The company also has a track record of successful drug partnerships including one that resulted in the breakthrough Covid vaccine I just mentioned a moment ago, as well as a new treatment pill designed to help revolutionize the fight against the global pandemic.
No wonder the company’s stock has been tripling the overall market’s returns.
Let me show you just how this storied firm stays competitive, and how they can make money for you…
The merger I just mentioned is between today’s Big Pharma leader, Pfizer Inc. (PFE), and Arena Pharmaceuticals Inc., a clinical-stage drug company.
One of Arena’s drug candidates, called Olorinab or APD371 and being developed for irritable bowel syndrome, uses an ingredient found in cannabis to achieve its effect.
And the company is looking at developing more cannabis-based medicines further down the line after Olorinab.
That’s no surprise – cannabinoids have huge potential in fighting disease. Take Epidiolex, for example. This CBD-derived medicine is FDA approved for the treatment of seizures associated with two rare and severe forms of epilepsy. There’s also Dronabinol, used to treat nausea caused by chemotherapy and loss of appetite caused by HIV/AIDS
However, if that’s all we had going on, I wouldn’t recommend the stock of the company acquiring Arena. This one cannabinoid drug is just not going to have a big sales impact.
Instead, it’s the reason behind the move that’s so important.
21st Century Vaccines
Pfizer doesn’t just have cannabis going for it, it also has MRNA
See, the visionary CEO of this drug giant has a knack for making brilliant strategic alliances. Just look at its work in coming up with a cutting-edge Covid vaccine.
It linked forces with German biotech firm BioNTech SE (BNTX) to use the revolutionary mRNA technology to create one of the two big Covid vaccines.
This ingenious new tech allowed the Covid vaccines to be developed in record time, because going backward from a given protein to the mRNA that’s used to create it is very easy.
Pfizer CEO Albert Bourla told his scientists in January of 2020 that they had 18 months to create a vaccine against Covid.
Given that vaccine development takes about a decade, Bourla knew that was a tough ask.
The trick was actually in coming up with the coating that would hide the mRNA bits from our immune system and make them be absorbed by our cells.
But FDA approval for the mRNA vaccine Pfizer developed with BioNTech came on August 23, 2021 – months ahead even Bourla’s accelerated timetable.
It was Bourla who worked to focus Pfizer more on the kind of groundbreaking innovation that created the mRNA vaccine as well as a more recent breakthrough, the antiviral Covid pill. This new medicine is taken by mouth by people infected by Covid and is very effective at preventing the infection from turning bad.
This pill was approved by the FDA late last year.
The Formula for Growth
The vaccine and the pill against Covid aren’t the only reason for investing in Pfizer. As I mentioned above, the company is still growing, with Bourla pushing it to acquire companies in new areas, including Arena in the cannabinoid sector.
As Pfizer shares have been tripling the overall market’s returns even as tech has entered into a correction, defined as a 10% decline from a previous high.
PFE has gained roughly 44% over the past year compared with a 14.6% return for the benchmark S&P 500.
Earnings growth is also on the rise. In fact, they leaped 127% in the most recent quarter and are expected to end the year with 85% growth in per-share profits.
Even cutting that back by two-thirds still gets you an earnings double in roughly 2.5 years, with stock price likely to follow.
This is the kind of stock that builds your net worth as the company forges ahead to keep the world safe from major diseases.
Cheers and good investing,
— Michael A. RobinsonTen hot stocks with massive upside potential [sponsor]
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Source: Strategic Tech Investor