Recent Patent Ruling A Positive For Pfizer

As noted by Gilbert, the District Court ruled in favor of Pfizer and Celltrion and said that Johnson & Johnson JNJ's patent for Remicade, a multi-billion-dollar product, is invalid. Johnson & Johnson's patent will now lapse in 2018.

Johnson & Johnson plans on appealing the ruling, but Pfizer continues to prepare for a launch of its equivalent (biosimilar) to Remicade in 2016. The analyst expects the biosimilar to drive sales of $360 million in 2016 and $662 million in 2017, "which includes OUS Inflectra (biosimilar infliximab), Nivestim (biosimilar filgrastim) and Retacrit (biosimilar epoetin zeta), and potential new launches in the US starting in 4Q16."

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Gilbert added that Remicade saw sales of $1.2 billion in the second quarter, which implies full-year sales of roughly $5 billion. The analyst suggested that under a hypothetical scenario in which Pfizer's product is the only biosimilar on the market with a 40 percent operating margin, it could contribute $0.05 per share to Pfizer's earnings per share. Even if Pfizer were to sell its product at a 30 percent discount to Remicade and command a 30 percent market share, Pfizer's potential "may be significant."

Gilbert maintains a Buy rating on Pfizer's stock with an unchanged $44 price target.

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