What's going on?

Pfizer revealed on Tuesday that it sold $13 billion worth of its Covid vaccine last quarter, as all you suckers for rational, peer-reviewed science play right into the drugmaker�s hands.

What does this mean?

Pfizer � which posted its quarterly earnings on Tuesday � is making hay while the sun shines, with sales of its Covid vaccine representing 52% of its total revenue last quarter. Trouble is, revenue from the company�s hospital segment � which specializes in things like surgical products � barely moved at all, while its internal medicine business (think heart and diabetes drugs) fell 3% compared to the same time in 2020. That brought Pfizer�s overall revenue in below analysts� expectations for the quarter, even though it was more than twice as high as the year before. And while Pfizer thinks it�ll rack up record revenue this year, it fell short of analysts� expectations there too � which might be why investors initially sent the company�s stock down 5%.

Why should I care?

Zooming in: Pfizer�s got leverage.
Pfizer can�t rely on its vaccine forever, which might be why analysts think it�ll start buying up biotech companies and expand into other treatments. There are a couple of reasons why now�s a good time to do just that. For one thing, biotechs are looking cheap: an index tracking some of the biggest biotech stocks is down over 20% in the last year. And for another, Pfizer�s stock � which is up 50% over the same period � is a pretty strong bargaining chip in negotiations.

The bigger picture: A big year for deals?
Pfizer�s not the only drugmaker with money to spend: analysis out in December showed that 18 of the biggest in Europe and the US have a potential cash pile of over $1.7 trillion between them this year. And sure, they might use that money to buy back shares or increase dividends, but some analysts think they�ll make up for a slow 2021 by splashing out on deals instead.