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Pfizer Adds to Its Big Bet on Weight Loss Drugs
Author: Jordan Chussler. Originally Published: 12/16/2025.
Key Takeaways
- 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 about 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.
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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 hoping that doing so can help recover revenue lost as demand for mRNA-based COVID-19 vaccines wanes.
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).
News of a yet-to-be-approved pill may not move the stock in the short term, but it does reflect Pfizer's commitment and momentum in the obesity-treatment market.
Under the agreement, Pfizer will pay a $150 million upfront fee 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 clinical progress toward approval is achieved, plus royalty payments on sales if the drug is eventually approved.
Those milestone payments will be contingent on YaoPharma successfully advancing the weight-loss pill through Phase 1 trials; Pfizer will assume responsibility for later-stage development.
Pfizer also plans to conduct combination studies — currently in mid-stage development — pairing YaoPharma's pill with its own GIP receptor agonist, a strategy similar to the one Eli Lilly has used with its weight-loss drug Zepbound and diabetes drug Mounjaro by targeting both GLP-1 and GIP.
Pfizer Is Positioning Itself for the Future of the Weight-Loss Drug Market
The deal underscores how aggressively Pfizer's executive team is pursuing a long-term position in the GLP-1 and broader obesity-treatment market.
Management has signaled a willingness to invest roughly $10.1 billion over the past month to pursue opportunities in this rapidly expanding 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 under $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, representing more than 75% of the GLP-1 agonists market. While other obesity interventions exist, including lifestyle changes 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 push into the weight-loss market pays off after the stock has hurt long-term holders, losing more than 31% over the past five years. Much of the weakness stems from declining COVID-vaccine sales, which contributed to revenue growth swinging from more than 95% at the end of 2021 to a decline exceeding 41% by the end of 2023.
Last year Pfizer rebounded modestly, registering a nearly 7% increase in revenue. Meanwhile, the stock's dividend has offset some investors' concerns. Pfizer remains a strong dividend payer with a current yield of 6.65% — about $1.72 per share annually. That payout has increased for 16 consecutive years, making the stock attractive to income investors despite a payout ratio that some find high.
For investors willing to trade immediate growth for income and exposure to the prescription weight-loss market, Pfizer can provide steady dividends while serving as a speculative play on the GLP-1 industry.
However, growth-focused investors may be reluctant to tolerate another year of lackluster performance. Analysts' average 12-month price target implies a little more than 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 continues to attract Wall Street 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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