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U.S. Government Stiffens Fight against Covid-19; Pfizer and BioNTech Benefit

Story Highlights

In its endeavor to curb the impact of COVID-19, the U.S. government has entered into a vaccine supply agreement with Pfizer and BioNTech. 

Drug manufacturing expert Pfizer Inc. (NYSE: PFE) and German biotechnology company BioNTech SE (NASDAQ: BNTX) have agreed to supply 105 million doses of COVID-19 vaccines to the U.S. government. The delivery, starting this summer, is expected to conclude in the fourth quarter of 2022.

The contract with the U.S. government seems to have lifted the market sentiments for the vaccine suppliers. Shares of Pfizer grew 0.6% to close at $50.94 on Wednesday. The stock inched up an additional 0.4% in the extended trading session.

Meanwhile, the American Depository Receipts (ADRs) of BioNTech rose 1.5% on Wednesday, closing the trading at $141.98. In the after-hours, the ADR advanced another 1.9%.

Inside the Headlines

The terms of the agreement require Pfizer and BioNTech to supply the agreed number of doses in 30 micrograms (µg), 10 µg, and 3 µg units. Also, the companies might provide the COVID-19 vaccines that have been designed to fight the Omicron variant.

The supply of Omicron-adapted vaccines is subject to authorization from the U.S. Food and Drug Administration (FDA).

The U.S. government will pay $3.2 billion for 105 million doses of COVID-19 vaccines. Also, if needed, the government may extend its demand by another 195 million doses.

“As the virus evolves, this new agreement will help ensure people across the country have access to vaccines that may provide protection against current and future variants,“ said Albert Bourla, the Chairman and CEO of Pfizer.

BioNTech’s Chief Business and Chief Commercial Officer, Sean Marett, said, “We appreciate the continued partnership of the U.S. government in our shared goal to help end this pandemic.”

Stock Rating

As per TipRanks, Pfizer has a Moderate Buy consensus rating based on six Buys and nine Holds. PFE’s average price forecast of $58.64 suggests 15.12% upside from the current levels.

BioNTech also has a Moderate Buy consensus rating based on three Buys and seven Holds. BNTX’s average price target stands at $236.40, reflecting upside potential of 66.5% from current levels.

A look at the price performances reveals that shares of Pfizer have grown 30.1% over the past year, while BioNTech’s ADR has plunged 36.6%.

Bloggers’ Sentiment

As per TipRanks, financial bloggers are 94% Bullish on PFE and 93% Bullish on BNTX versus the sector average of 71%.

Conclusion

This latest agreement is expected to boost Pfizer and BioNTech’s revenues and strengthen their relationship with the U.S. government. This will also add new vigor to the U.S. government’s initiatives to curb COVID-19.

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