Pfizer Just Raised Its 2026 Guidance -- but the Boost Leans Heavily on a Drug Running Out the Patent Clock

Pfizer (NYSE: PFE) reported its second-quarter results on Aug.4. The company's performance was pretty good. Revenue increased 3% year over year to about $15 billion. That doesn't sound particularly impressive, but the drugmaker has been struggling to grow its sales in recent years. So, this isn't too bad a result for the pharmaceutical giant.

On the bottom line, Pfizer's adjusted earnings per share were $0.77, barely lower than the $0.78 reported in the year-ago period. The company's financial results beat expectations, and on top of that, Pfizer revised its revenue guidance upward for the fiscal year 2026. It now expects revenue between $60.5 billion and $62.5 billion, up from its previous estimate of $59.5 billion to $62.5 billion. However, the market wasn't too impressed.

Image source: The Motley Fool.

Running out of time

Pfizer noted that the performance of its non-COVID portfolio was particularly strong. One medicine that helped push sales growth in the right direction was Eliquis, an anticoagulant. Pfizer shares the rights to this therapy with Bristol Myers Squibb (NYSE: BMY). In the second quarter, Pfizer's revenue from Eliquis was $2.4 billion, up 21% from the year-ago period. There is just one problem: Eliquis will lose patent exclusivity by the end of the decade.

That's sooner than it seems by pharmaceutical industry standards, given how long it takes to develop new medicines. Unless Pfizer can find a way to fill the gaping hole Eliquis will leave behind -- it is currently its single best-selling drug -- a slight increase in its guidance due to Eliquis (among other products) won't turn the bears into convinced bulls. It could actually have the opposite effect, since it may send the message that Pfizer still relies too much on this medicine, which will soon face generic competition, despite not having found a way to replace it yet.

There is more to the story

Pfizer may not have found a medicine that will replace Eliquis yet, but it is slowly working toward that goal. The company has significantly expanded its pipeline in recent years and boasts a wealth of investigational therapies that could, eventually, generate over $1 billion in annual sales. Pfizer's work in the GLP-1 market is particularly noteworthy here. The company's leading candidate, berobenatide, is undergoing phase 3 studies. Berobenatide posted outstanding phase 2 clinical trial results on both efficacy and tolerability measures. Furthermore, it is a long-acting medication that can be administered monthly.

These factors make it a promising candidate. It's too early to call berobenatide Pfizer's replacement for Eliquis, but given the clinical trial data we have seen so far and the fact that the weight-loss market is growing incredibly rapidly (and should continue to do so for a while), cautious optimism is warranted.

It's also worth pointing out that berobenatide isn't Pfizer's only candidate. The company boasts several more, including an oral option. We can also look at Pfizer's pipeline outside this area, and we see a similar story: Highly promising candidates in phase 2 or phase 3 studies. Pfizer could hit what may be the "holy grail" in the pharmaceutical industry with one of its oncology candidates, PF'4404: A potential pipeline-in-a-drug.

The company hopes that it will become a backbone therapy across multiple cancer types. The economics of developing a single drug that can earn approval across many indications are very attractive for drugmakers. That's what PF'4404 could offer Pfizer. What does all of this tell us about the company? Yes, it is still somewhat dependent on Eliquis, a drug that will lose patent exclusivity soon.

But Pfizer's deep pipeline seems more than capable of filling that gap. Even assuming a modest 50% success rate for ongoing phase 3 studies for brand-new clinical compounds, the healthcare giant should have a much rejuvenated approved portfolio within a few years. As it earns clinical wins, the stock could recover. The bottom line: Pfizer is still worth investing in.

Prosper Junior Bakiny has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Bristol Myers Squibb and Pfizer. The Motley Fool has a disclosure policy.