Kok Weng Tang @coolingman: "𝗟𝗲𝘁 𝗺𝗲 𝘀𝗵𝗮𝗿𝗲 𝗺𝘆 𝗽𝗲𝗿𝘀𝗼𝗻𝗮𝗹..."

Malaysia

Edited

𝗟𝗲𝘁 𝗺𝗲 𝘀𝗵𝗮𝗿𝗲 𝗺𝘆 𝗽𝗲𝗿𝘀𝗼𝗻𝗮𝗹 𝘃𝗶𝗲𝘄 𝗼𝗻 𝗣𝗳𝗶𝘇𝗲𝗿 Right now, it has reached an agreement with Trump. $PFE (Pfizer) 1️⃣𝗧𝗮𝗿𝗶𝗳𝗳 𝗲𝘅𝗲𝗺𝗽𝘁𝗶𝗼𝗻 Let’s take an extreme example and assume full exemption! Currently, Pfizer’s gross margin is around 70%. Among the biopharma leaders, reaching 80% is already considered extremely high. So let’s use 80% as a benchmark. In recent years, its revenue (post-pandemic) has been around $65 billion, which means it could gain an additional $6.5 billion in net profit. Let’s continue from here! 2️⃣𝗥𝗲𝗾𝘂𝗶𝗿𝗲𝗱 𝗨.𝗦. 𝗱𝗼𝗺𝗲𝘀𝘁𝗶𝗰 𝗶𝗻𝘃𝗲𝘀𝘁𝗺𝗲𝗻𝘁 ($70 𝗯𝗶𝗹𝗹𝗶𝗼𝗻) Let’s spread this across 15 years: $70 billion ÷ 15 = about $4.67 billion per year, not yet counting borrowing costs. For reference, when Pfizer acquired Seagen for $43 billion (with $31 billion financed through debt), it currently pays $2–2.5 billion in annual interest. Using that as a guide, if Pfizer takes on debt to finance this new domestic investment, the annual interest expense could be around $5 billion. 𝗖𝗼𝗻𝗰𝗹𝘂𝘀𝗶𝗼𝗻 ✅ Gain from tariff exemption: ~$6.5 billion ❌ Added costs from amortization + interest: ~$7.0 billion (2.5 + 4.67) Of course, this agreement will likely increase Pfizer’s market share and sales. But don’t forget, it will also require lowering prices! This TrumpRx deal could, in the medium to long term, make Pfizer’s revenue structure more diversified and defensive, giving it more share in public, discount, and mid-tier drug markets, thereby reducing its overreliance on blockbuster medicines to some extent. In my opinion, in the long run Pfizer will still struggle to break free from its dependence on blockbuster drugs (which have stronger pricing power). In other words, if the Seagen acquisition fails to deliver blockbuster drugs, this could turn into a money-burning pit. So before buying, have you thought about this issue? Feel free to share your thoughts—I’d love to hear different perspectives. $MRK (Merck & Co.) $NVO (Novo-Nordisk A/S SPONS ADR) $JNJ (Johnson & Johnson)

4 Mentioned

PFE

Pfizer

MRK

Merck & Co.

NVO

Novo-Nordisk A/S SPONS ADR

JNJ

Johnson & Johnson

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