(Bloomberg) -- The U.S. will pay Pfizer Inc. $5.3 billion for an order of 10 million courses of its experimental Covid-19 pill beginning later this year.
The purchase is contingent on U.S. clearance of the Covid oral antiviral, which Pfizer has applied for, according to a statement from the company Thursday. Bloomberg News reported the order earlier, citing people familiar with the situation, without the financial details. The shares gained 0.6% at 9:40 a.m. Thursday in New York.
Pfizer has become one of the companies most involved in the response to the pandemic, with its Covid pill and messenger RNA vaccine developed with Germany's BioNTech SE. The U.S. said Wednesday that it would offer funds to companies including Pfizer to expand mRNA vaccine production.
The U.S. antiviral order “looks like just the beginning, suggesting the bottom end of the $7.5-$25 billion sales range for the drug in our scenario analysis is too low,” Sam Fazeli, a Bloomberg Intelligence analyst, said in a research note. “The implied price of $529 a course is driven by the volume of the U.S. deal, equating to 20% of Pfizer's 2022 production expectations.”
The U.S. has also ordered about 3.1 million courses of another Covid oral antiviral from Merck & Co. and has an option in its contract to purchase more than 2 million additional courses. While the Pfizer treatment outperformed Merck's in separate clinical trials, the results may not be comparable because of potential differences in the patient groups, Fazeli said.
Pfizer has said it will invest as much as $1 billion to manufacture and distribute the pill.
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