What’s Going On Here?Pfizer revealed on Tuesday that it sold $13 billion worth of its Covid vaccine last quarter, as all you suckers for rational, peer-reviewed science play right into the drugmaker’s hands. What Does This Mean?Pfizer – which posted its quarterly earnings on Tuesday – is making hay while the sun shines, with sales of its Covid vaccine representing 52% of its total revenue last quarter. Trouble is, revenue from the company’s hospital segment – which specializes in things like surgical products – barely moved at all, while its internal medicine business (think heart and diabetes drugs) fell 3% compared to the same time in 2020. That brought Pfizer’s overall revenue in below analysts’ expectations for the quarter, even though it was more than twice as high as the year before. And while Pfizer thinks it’ll rack up record revenue this year, it fell short of analysts’ expectations there too – which might be why investors initially sent the company’s stock down 5%. Why Should I Care?Zooming in: Pfizer’s got leverage.
Pfizer can’t rely on its vaccine forever, which might be why analysts think it’ll start buying up biotech companies and expand into other treatments. There are a couple of reasons why now’s a good time to do just that. For one thing, biotechs are looking cheap: an index tracking some of the biggest biotech stocks is down over 20% in the last year. And for another, Pfizer’s stock – which is up 50% over the same period – is a pretty strong bargaining chip in negotiations.
The bigger picture: A big year for deals?
Pfizer’s not the only drugmaker with money to spend: analysis out in December showed that 18 of the biggest in Europe and the US have a potential cash pile of over $1.7 trillion between them this year. And sure, they might use that money to buy back shares or increase dividends, but some analysts think they’ll make up for a slow 2021 by splashing out on deals instead. | 
