Pfizer CEO Albert Bourla sold almost $5.6 million worth of stock on Monday, the same day the drugmaker announced positive early data on its experimental coronavirus vaccine that sent shares soaring.
Shares of Pfizer jumped by almost 15% on Monday after the company and its partner BioNTech said its vaccine was more than 90% effective in preventing Covid-19 among those in the trial without evidence of prior infection.
Bourla sold 132,508 shares at an average price of $41.94 per share, or nearly $5.6 million, according to securities filing. The sale was part of a pre-scheduled 10b5-1 trading plan, which was adopted on Aug. 19, the filing shows, as the company was enrolling participants in its late-stage trial.
The sale accounted for 61.8% of the shares owned both directly and indirectly by Bourla. He still owns 81,812 both directly or indirectly, the filings show. Pfizer confirmed the sale in a statement and added that Bourla has a larger holding in the company through the company’s “qualified and nonqualified savings plans,” which likely means stock options.
“After being with the company for more than 25 years, Albert owns a substantial amount of Pfizer stock under our qualified and nonqualified savings plans,” a Pfizer spokesperson said in a statement. “He now holds approximately nine times his salary in Pfizer stock after the sale this week.”
According to the company’s 2019 proxy report, Bourla, who became CEO on Jan. 1, 2019, was being paid a base salary of $1.65 million starting April 1. Nine times that salary would be about $15 million worth of shares.
Baird biotech analyst Brian Skorney defended the sale, saying that it’s a “highlight of how capitalism can work at its best.”
“What’s great about the biopharma industry is that there’s an incentive scheme for private industry to come up with drugs that meaningfully change the healthcare dynamic in the country,” he said in a phone interview. “I don’t know that there’s even an example, certainly not in my lifetime that I can point to, where something will have such a drastic positive effect on the whole world as a vaccine for Covid.”
Skorney said that Bourla “fully deserves this” and that his profit from the sale is miniscule compared to the net benefit an effective Covid-19 vaccine will provide the world.
“More than just that, I feel like I should just send Albert some money myself to be like, ‘thank you,'” Skorney said. “We have a sight line to getting to the end of this dark tunnel and that is in very large part due to the efforts at Pfizer and the chief executive.”
Bourla is not the first pharmaceutical or biotech executive to cash in on his company’s stock gains during the pandemic. The top five executives at the biotech company Moderna, which has another Covid-19 vaccine in development, have sold more than $80 million this year as the company’s stock shot up more than 300% since Jan. 1, Stat News reported earlier this year.
But Moderna, unlike Pfizer, accepted money from the U.S. government to help fund the research and development of its Covid-19 vaccine through Operation Warp Speed, the Trump administration’s effort to quickly bring a vaccine and therapeutics to market. Pfizer participated in Operation Warp Speed by accepting money for the acquisition and distribution of doses of the vaccine, but federal funding did not go toward the development of the vaccine.
And while Moderna’s stock has soared this year during the pandemic, Pfizer’s stock is down more than 2% since Jan. 1. Skorney said the company might not directly profit all that much from bringing a Covid-19 vaccine to market. It’s unclear how much profit the vaccine will generate.
Nonetheless, Jay Clayton, the chairman of the Securities and Exchange Commission, has cautioned executives against selling stock amid the volatility of the pandemic because it could create bad optics.
“If you are an executive of a public company in a time like this there may be idiosyncratic circumstances where you would be in the market, but, as we’ve said for a long time, in this volatile time, please practice good corporate hygiene,” he told CNBC in May. “Why would you want to even raise the question that you were doing something that was inappropriate?”
CNBC’s Meg Tirrell contributed to this report.
