Relationship of Pfizer with Nifty
*Author:
Priyanka Manohar Shirude
*Introduction :
The company was established in 1849 in New York Pfizer develops and produces medicines and vaccines for immunology, oncology, cardiology, endocrinology, and neurology. The company’s largest products by sales are the Pfizer–BioNTech COVID-19 vaccine , Nirmatrelvir/ritonavir ($18 billion in 2022 revenues), Apixaban ($6 billion in 2022 revenues), a pneumococcal conjugate vaccine ($6 billion in 2022 revenues), and Palbociclib ($5 billion in 2022 revenues). In 2022, 42% of the company’s revenues came from the United States, 8% came from Japan, and 50% came from other countries.
*Objective:
Calculation of beta of Pfizer and significance
*Literature Review:
Wealth Creation
The consolidation created the world’s third largest pharmaceutical company with a market capitalization of approximately 90 billion euros behind US-based Pfizer and Britain’s GlaxoSmithKline. Under the terms of the revised bid, Sanofi offered five of its shares for each Aventis shares held plus €120 in cash. During the −78 to +173 (254-day merger period) covering January 1, 2004–January 2005, the Aventis stock gained 9.20% on cumulative basis.(Kumar, 2019)
New Drugs
We model the collaboration vs. competition decision problem for two firms using a game‐theoretic model and derive the collaboration conditions. establish conditions based on probabilities of success of drug development, cost rates, and potential market shares under which the firms should collaborate, and show that there exist scenarios under which the firms actually collaborate on the lower efficacy drug. apply analytical model to illustrate a case study involving collaboration between Bristol‐Myers Squibb and Pfizer.(Tian & at al 2021).
Data Collection:
Data was collected from Yahoo finance site. From 1st April 2022 to 31st March 2023, then data was manipulated from Friday closing price and weekly returns were calculated. Weekly return of NIFTY is considered X, weekly return of Pfizer company is considered Y, Y was regressed on X.
Data Analysis:
Pfizer company = (-0.455) + 0.4038 Nifty Returns
(2.76)
Bracket Value = t-stat = 2.76
N = 49 , R^2 = 0.14 , F = 7.6 , Significance = 0.008
Result:
The above equations shows the relationship between Y & X I.e. Nifty & Pfizer Company . Positive sign of b means there is direct relationship which means X rises & Y falls And vice versa
In this equation b= 0.40, if X rises by 1 unit Y will rise by 0.40 unit
R^2 = 0.14 wich means 14% Y means Pfizer is explained by X means Nifty 50 similarly F= 7.6 Which is also more than the table value which means overall model is statistically significant at 5% significant level
*Conclusion:
Since it can be seen that value of beta (b) is more than 1 which implies Pfizer company is good for long term investment.
*Reference
· B. Rajesh Kumar, 2019. “Sanofi–Aventis Merger,” Management for Professionals, in: Wealth Creation in the World’s Largest Mergers and Acquisitions, chapter 32, pages 277-280, Springer.
· Zhili Tian & Haresh Gurnani & Yi Xu, 2021. “Collaboration in Development of New Drugs,” Production and Operations Management, Production and Operations Management Society, vol. 30(11), pages 3943-3966, November.