Government contract for Pfizer

Shares in Pfizer (PFE) have risen amid reports that the US government has ordered 10 million courses of treatment with its Pfizer Paxlovid tablets for COVID-19.

President Joe Biden said on Thursday that the US would purchase 10 million courses of Covid tablets from Pfizer (PFE), an oral antiviral drug that has proved highly effective in preventing hospitalisation of high-risk adults in clinical trials.

Shares in Pfizer, up 39.7% YTD, closed up 1.06% on Thursday.

Pfizer's shares have jumped 16.24% since Pfizer announced on November 5 that its oral drug Paxlovid was highly effective.

Pfizer will receive this largest government contract of $5.29bn after the US Food and Drug Administration (FDA) approves the emergency use of Paxlovid tablets. If approved, Paxlovid could be administered at home, reducing the burden on hospitals.

The company submitted the application to the FDA on Tuesday.

Paxlovid has demonstrated 89% efficacy in preventing hospitalisation and death in 1,219 high-risk patients, when taken within three days of the onset of symptoms. Trials have not recorded any deaths among people taking the treatment. The supply of Paxlovid is likely to be limited. Pfizer said it plans to produce 180,000 packs next month and increase production to 50 million by the end of 2022.

Pfizer has pledged to invest up to $1bn in the production and distribution of the pills.

Last month, the US government agreed to buy 3.1 million courses of Covid-19 treatment with Merck tablets (MRK) for about $2.2bn.

Shares in Merck have risen 6.5% since the start of 2021, but have fallen sharply on news of a major competitor such as Pfizer's arrival on the pill.

Italy's health ministry said on Thursday it was ready to buy 50,000 courses each of Merck and Pfizer's antiviral drugs against COVID-19 as soon as the two companies are able to supply them.

According to the US Centers for Disease Control and Prevention (CDC), as of Thursday morning 228,570,531 people in the country had received at least one dose, while 195,713,107 had been fully vaccinated. The CDC list includes two-dose vaccines from Moderna (MRNA) and Pfizer BioNTech, as well as Johnson & Johnson (JNJ) single-dose vaccine. About 32.5 million people in the US have received a booster dose of COVID-19 vaccine from Pfizer, Moderna or Johnson&Johnson. Booster doses from Moderna and Johnson & Johnson were approved by the US health regulator on 20 October.