FDA approves Pfizer vaccine for kids based on reduced hospital visits

You read that right.

The US Food and Drug Administration (FDA) approves vaccines and other drugs in the US for various conditions and demographics. Right now, the age group in question is 5-11 year-olds, for whom the FDA has just considered Emergency Use Authorization (EUA) for a two-course one third shot of the Pfizer vaccine.

Based on what’s gone before, we’d usually expect some sort of Mickey Mouse study such as the first ones for both Pfizer and Moderna.

But nope, the FDA is now either such a joke or so well bought that they didn’t even need a proper study. Or didn’t want one. Here’s a fun fact right out of the FDA briefing doc:

143 children under 14 have died of Covid in the US.

Based on the CDC estimate that at least half of the kids have already been exposed to Covid, the vaccine can potentially save around 130 lives, assuming — as Pfizer does for this particular study — that the vaccines offer long term protection and don’t lose efficacy over time. Of course, Pfizer assumed the opposite when requesting authorization for the booster shots.

The question is: Should 28 million kids be given the vaccine to potentially save 130 lives?

And by potentially, we mean, it wasn’t actually tested.

Pfizer did test it on 1518 kids, (and 750 placebo in a double blind study) but none of them got sick, so there’s no proof that it works.

However, they did test the full dose on young adults aged 16-25, which they claim is close enough to 5-11 year old kids.

Effectiveness of the 10 µg dose in the 5 to <12 years of age group inferred based on the successful immunobridging analysis, which compared SARS-CoV-2 neutralizing responses in a subset of participants in this age group in Study C4591007 to responses in a group of young adult participants 16 to 25 years of age in the C4591001 efficacy study (the most clinically similar subgroup of the study population in whom vaccine efficacy (VE) had been demonstrated) (Section 3.8.1).

Source: FDA Advisory Committee Briefing Document 26 October 2021

There’s nothing unscientific about assumptions, as long as scientists are making them.

In fact, the benefit is so tiny that they don’t even discuss lives saved in terms of the benefit. Instead, they talk about hospitalizations.

That’s right folks, white and black lives matter — but not as much as hospital visits. That’s the new metric for Emergency Use Approval: saving visits to the hospital — 170 per million.

The estimated numbers of prevented COVID-19 cases and associated hospitalizations for 1 million vaccinated children 5 to <12 years of age during the 120 days post-vaccination are ~33,600 and 170, respectively

Source: FDA Advisory Committee Briefing Document 26 October 2021

Now, the anti-vaxxers may ask about vaccine side effects, especially myocarditis. Don’t worry, the FDA is on the case. Based on Pfizer’s own research and the ongoing global phase III trial that most of the world is participating in, Phizer estimates that there would be 21 cases per million, or 588 if 28 million kids were vaccinated.

The estimated numbers of prevented COVID-19 cases and associated hospitalizations for 1 million vaccinated children 5 to <12 years of age during the 120 days post-vaccination are ~33,600 and 170, respectively; in contrast, 21 post-vaccination myocarditis cases would be expected [per million].

Source: FDA Advisory Committee Briefing Document 26 October 2021

You can see why they avoided talking about saving lives. Causing 588 cases of myocarditis to save 130 lives doesn’t really add up, especially when the five year mortality rate of myocarditis is 50%, and even higher for kids.

Any suggestion that vaccines kill more kids than they save is misinformation, so let’s not go there. Myocarditis may kill 290 kids. But don’t dwell on the negative.

Vaccines could save 130 kids’ lives, based on scientific assumptions and inferences.

And even more importantly, they could save 940,800 visits to the hospital. Just think about the reduced carbon footprint of saving nearly a million car trips with only 56 million trips to the vaccine clinic. We’re with the FDA on this one.

Oh yeah, did we mention that based on the data above, the FDA gave emergency use authorization for the kids.

Here’s how to make 30x your money

While we think Pfizer is hoodwinking the entire world, it’s hard to deny how awesomely fantastic they are at doing it. So let’s make some money.

Since we recommended going long Pfizer on July 3, the stock has gained about $5. To be honest, this is almost zero compared to the market. In fact, over the past 12 months, Pfizer actually underperformed the S&P500.

This isn’t going to last.

As the world goes into recession and people tighten their belts (and the Fed continues to loosen it’s own belt and print like there’s no tomorrow), one of the few things we can depend on is governments buying truck loads of vaccines and Pfizer making a fortune off the back of it.

Even better, Pfizer won’t have to spend a bunch more on bribes. These “booster” shots will continue to roll out for years with minimal palm greasing by Pfizer.

Right now, PFE is trading at 47.30, which is a PE of 14x and dividend yield of 3.5%.

So even if you don’t like the company, don’t like the story etc etc, it’s still worth taking money out of your zero interest bank account or 0.05% money market account and getting a bloody good yield in a zero interest environment.

Even better, the company is raking in cash — $11 billion last quarter. At this rate, it’s trading at around 8x free cash flow.

Usually a company will only trade at this (comparatively) low valuation if the market expects it to deliver poor results.

The thinking is that the vaccine was a once off and there’s no ongoing value. We think differently.

• The Biden regime is going full throttle on the vaccine and boosters. It won’t win all the battles, but as long as the press and big tech are supporting the narrative, the population will comply.
• Other countries such as Australia and New Zealand and much of western Europe are likely to mandate annual booster shots.
• While Moderna and AstraZeneca vaccines have been sidelined, cancelled or reduced, Pfizer is like the teflon don of vaccines. That whole market now belongs to Pfizer
• And what we most like is that the annual top up jabs will probably be a cocktail of all sorts of stuff that the FDA needs delivered into bodies each year. That means even more annual doses for Pfizer and zero product liability.

You can’t make this stuff up.

Realistically, Pfizer should be trading at least at the PE of the S&P, which would be a 50% price rise from here (or more given that the 14x is trailing 12 months).

We can’t really expect the stock, nor the S&P, to trade rationally in this sort of environment. Nevertheless, once the company reports another quarter of solid earnings, we can expect the price to come up a bit.

How much?

The prior quarter EPS was 1.45. We can expect the company to continue similar earnings over the next two quarters, which would bump its annual EPS to 5.90. Even if it just maintained a PE of 14x, this would bump the price up to $82.60 — a 76% rise from here.

This should occur in the next six months, so we should pick up a good return with the June call options.

Right now you can buy the $65 June calls for 0.63. The Yahoo finance link is: PFE220617C00065000

I recommend buying the Pfizer (NYSE:PFE) June 65.00 call options at 0.63 ($63 per contract), or $3,150 for a 50-contract position. It’s worth spending up to 0.70 on these.

If Pfizer has a quick run up any time between now and the end of the year, we can expect to at least double our money. Should the stock take off and hit $82 between now and June, then these options will be worth at least $19 each, or $95,000 for a 50-contract position. That’s a juicy 30x.

Good investing.

The Ostrich Head

Position opened at 0.62

Update 10 November

The options traded between 0.58 and 0.62, so we’ll take 0.62 as the opening price, which is $3.100 for a 50-contract position.