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Boxes of Pfizer’s Paxlovid antiviral medication arranged in a warehouse in Shoham, Israel.

Boxes of Pfizer’s Paxlovid antiviral medication arranged in a warehouse in Shoham, Israel. (Kobi Wolf/Bloomberg)

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Pfizer slumped after Paxlovid, its pill for treating COVID-19, failed to show benefit as a preventive therapy in a trial.

Paxlovid is poised to become one of the fastest-selling drugs of all time, with $24 billion in projected 2022 sales, according to analytics group Airfinity. Pfizer has also reaped billions in global sales from its COVID-19 vaccine.

The company said late Friday that the drug failed to hit its main goal of reducing the risk that adults exposed to the coronavirus through contact with a household member would become infected. Compared with those who took a placebo, people who received Paxlovid had about a third less risk of infection, which wasn't statistically significant.

The shares fell 2.2% at 9:36 a.m. in New York. They had declined 17% this year through Friday's close.

The trial failure, along with reports of rebounding coronavirus levels in some patients who have completed a course of Paxlovid, are unlikely to change the drug's sales potential, according to Bloomberg Intelligence analysts John Murphy and Sam Fazeli.

"The trial miss at most takes away a small incremental sales opportunity in future years," they said Monday in a research note. The reports of rebound infections are "also not surprising as viral dynamics during an infection are unlikely to fit perfectly with a rigid 5-day course."

Morgan Stanley analysts, who had estimated the drug's sales to reach $48 billion in 2022, said the prophylaxis data might affect their forecast.

"The addressable opportunity for the drug is more limited, which could impact government contracting decisions and hence we see downside risk to our Paxlovid estimates," according to a note from Terence Flynn. "Our recent investor conversations suggested measured expectations for an upgrade" to Pfizer's Paxlovid guidance.

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