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Today's Bonus Story Pfizer Adds to Its Big Bet on Weight Loss DrugsWritten by Jordan Chussler. Published 12/16/2025. 
Key Points - The health care sector has led the S&P 500 over the three months, but Pfizer has lagged of late, slipping 5% since the start of October.
- As the Big Pharma company continues to struggle to replace COVID-19 vaccine revenue, it is heavily learning into the semaglutide and GLP-1 weight loss drug trend.
- Last week, the company signed a $2.1 billion licensing agreement with a Chinese pharma company to develop its early-stage weight loss pill.
Health care stocks have been on a run lately, leading the S&P 500's 11 sectors over the past three months with a gain of 11.55%. Unfortunately for some investors, that recent rally has not included all of the Big Pharma mainstays. Pfizer (NYSE: PFE), the maker of Chantix, Eliquis, and Paxlovid, has seen its shares slide 5% since the start of October. By comparison, other mega-cap pharmaceutical companies such as Johnson & Johnson (NYSE: JNJ), Regeneron Pharmaceuticals (NASDAQ: REGN), and Eli Lilly (NYSE: LLY) are up nearly 14%, 24%, and 25%, respectively, over the same time frame. Elon Musk's Starlink project is generating major speculation ahead of a potential IPO that some analysts believe could reach a historic $100 billion valuation. According to James Altucher, there may be a smart "backdoor" way for everyday investors to position ahead of that event without needing traditional IPO access — and he says it can be done for under $100. He's also sharing a free ticker tied to this trend for anyone who wants to take a closer look. Click here to learn more Despite Pfizer making headlines on Nov. 13 after acquiring obesity biotech Metsera in a $10 billion deal, the stock has only mustered a 0.23% gain since then. The nearly 177-year-old biopharma company is once again looking to expand its role in the weight-loss drug market, with management and shareholders alike hoping that doing so can help recover revenue lost as demand for mRNA-based COVID-19 vaccines waned. Pfizer Looks to Gain Market Share After Enormous Deal With YaoPharma On Tuesday, Dec. 9, Pfizer struck a $2.1 billion licensing deal with China's YaoPharma to develop a GLP-1 weight-loss pill that is in early-stage development. The drug works similarly to Wegovy, the game-changing weight-loss injection from competitor Novo Nordisk (NYSE: NVO). Of course, news of a yet-to-be-approved weight-loss pill may not be enough to move the stock in the short term. It does reflect the company's commitment and momentum in the obesity treatment market. The details of the agreement include Pfizer paying a $150 million fee upfront to YaoPharma's parent company, Shanghai Fosun Pharmaceutical, which has an $8.4 billion market cap. Additionally, Pfizer could pay YaoPharma up to $1.94 billion in milestone payments if progress on the drug's approval is demonstrated, plus royalty payments on sales of the drug if and when it is approved. Those milestone payments will be contingent upon YaoPharma successfully navigating the weight-loss pill through Phase I trials, with Pfizer taking control of later-stage development. Pfizer also plans to conduct combination studies, currently in mid-stage development, pairing YaoPharma's pill with its own GIP-targeting compound — a strategy Eli Lilly has adopted with its weight-loss drug Zepbound and its diabetes drug Mounjaro, which target both GLP-1 and GIP. Pfizer Is Positioning Itself for the Future of the Weight Loss Drug Market The deal is noteworthy because it demonstrates how aggressively the company's executive team is pursuing a more prominent, long-term position in the GLP-1 and broader obesity treatment market. Pfizer's leadership has shown it is willing to invest roughly $10.1 billion over the past month as it targets a rapidly growing industry. Forecasts from market analysis firm Grand View Research suggest the GLP-1 weight-loss drug market could grow at a compound annual growth rate (CAGR) of 18.54% from 2025 to 2030, rising from less than $14 billion at the start of this year to an estimated $48.84 billion by 2030. Grand View Research found that North America accounts for the largest revenue share, with more than 75% of the GLP-1 agonists market. While other obesity interventions exist — including lifestyle modification and bariatric surgery — GLP-1 drugs remain the preferred option among many physicians and patients. Patient Investors Can Enjoy PFE's Sizable Dividend Shareholders are hoping Pfizer's foray into the weight-loss drug market proves fruitful after the stock has delivered a loss of more than 31% over the past five years. Much of that decline stems from falling COVID-vaccine sales, which contributed to a swing in revenue growth from more than 95% at the end of 2021 to a decline of more than 41% by the end of 2023. Last year, Pfizer rebounded marginally, registering a nearly 7% increase in revenue. At the same time, the stock's yield has eased some investors' concerns. Pfizer remains a strong dividend payer with a current yield of 6.65% — or $1.72 per share annually. That payout has increased for 16 consecutive years, making the stock a favorite among income investors despite its reported 100% dividend payout ratio raising some eyebrows. For investors willing to forego immediate capital gains and who are bullish on the near- and mid-term prospects for prescription weight-loss drugs, Pfizer can continue to provide income while serving as a speculative position in the GLP-1 industry. However, growth-focused investors might be reluctant to tolerate another year of lackluster performance. Analysts' average 12-month price target implies just over 10% potential upside from the stock's current price and carries a consensus Hold rating. Meanwhile, short interest has been steadily rising as the stock attracts bears. Currently, about $3.58 billion of the float is shorted — nearly 84% more than PFE's short position at the end of January 2025.
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