On Monday before the stock market opened, Pfizer announced that its COVID-19 mRNA vaccine had proven 90% effective so far in its ongoing late-stage trial, lifting the company’s shares nearly 8% through the course of the day.
The same day, in a stock sale Pfizer says was planned months ago, CEO Albert Bourla offloaded 132,508 shares—more than 60% of his total holdings—for $5.6 million.
Insider trading? Nope. Extraordinarily lucky? To be sure. And no doubt the size and timing of this sale, coupled with Bourla's confidence over the last few months leading to Monday's data announcement, are enough to rile up critics of executive pay packages in Big Pharma.
Bourla sold his shares under SEC rule 10b5-1, which allows company insiders to sell a predetermined amount of stock on predetermined dates. All 10b5-1 plans must be established when the insider does not have access to “material nonpublic information,” the rule states.
Bourla’s 10b5-1 was set up on August 19, according to the SEC filing. That was a few weeks before Pfizer and its development partner BioNTech announced positive results from animal trials of their vaccine. The phase 3 human trial of the vaccine began July 27.
Bourla was making some noise at the time about the possibility of getting a vaccine approved before the election, but he later tempered his predictions. And the company did not solidify its status as the front-runner in the race to end the COVID-19 pandemic with a vaccine until it released the efficacy data in people this week.
Still, the CEO’s good fortune can’t be understated: He sold his tranche of shares at an average price of $41.94, just shy of the company’s Tuesday high of $41.99. (The stock has since settled and opened at $38.88 today.)
A spokesperson for Pfizer confirmed in a statement emailed to FiercePharma that the stock sale “is part of Dr. Bourla's personal financial planning” and was established under a 10b5-1 plan.
Pfizer may be in the spotlight now because of its rapid COVID-19 vaccine development strategy, but Bourla’s compensation has been on an upward trajectory for some time. He took over as CEO in 2018 and saw his pay package rise 82% last year to nearly $18 million, in a mix of salary, cash incentive pay, equity awards and perks. The cash portion of his 2019 pay amounted to more than $5.2 million.
Bourla had pledged a renewed focus on R&D when he took over, and it paid off with 10 FDA approvals in 2019. That included nods for new drugs, notably Vyndaqel for ATTR cardiomyopathy, as well as new indications. For example, the immuno-oncology med Bavencio combined with Inlyta was approved to treat first-line kidney cancer in the U.S., Japan and Europe.
If the COVID-19 vaccine receives emergency authorization this year, as expected, it could bring in $4.6 billion in sales next year, SVB Leerink analysts projected earlier this week. Pfizer’s 90% efficacy result prompted SVB Leerink to increase its projections for the adoption rate of the vaccine by 4% to 5%, and to predict that pediatric vaccinations would boost Pfizer and BioNTech's market share a bit, even if competitors like mRNA player Moderna also succeed.
Pfizer will face plenty of challenges in the rollout of the COVID-19 vaccine, though. The shots have to be stored at -94° Fahrenheit, for example. To pull it off, Pfizer has set up its own distribution network rather than using the government’s provider, McKesson.
The company could seek emergency authorization from the FDA for its vaccine, dubbed BNT162b2, by the end of this month. Pfizer expects to deliver 50 million doses this year and 1.3 billion next year if it gets the green light.