Vials with Pfizer-BioNTech and Moderna coronavirus disease (COVID-19) vaccine labels are seen in this illustrative photo taken March 19, 2021.
Dado Ruvic | Reuters
Pfizer and Moderna expect $51 billion in combined vaccine sales over the coming year, even as the omicron wave wanes significantly in many parts of the world and the two companies believe the pandemic is entering an endemic phase where the virus will be less disruptive to society.
Pfizer predicts $32 billion in Covid vaccine sales for 2022, while Moderna predicts at least $19 billion in sales, the companies said in their fourth-quarter earnings statements released last month.
These are minimum sales, reflecting contracts that have already been signed by nations around the world anticipating their needs for the year. But they could be much higher, depending on the trajectory of the virus. Pfizer just raised its forecast for 2022 Covid vaccine sales by $1 billion from its previous forecast given to investors in the third quarter, while Moderna raised its forecast by $2 billion.
Business expectations for 2022 come after posting bumper revenue in the first full year of Covid vaccine rollout. Pfizer sold $36.7 billion of its Covid vaccine globally in 2021, representing 45% of its total annual revenue of $81.2 billion. Moderna’s vaccine is its only commercially available product, and the $17.7 billion in sales in 2021 effectively represents all of its $18.5 billion in annual revenue.
Vaccine makers are making solid profits on their vaccines. Moderna soared after the vaccine was rolled out, posting a net profit of $12.2 billion for 2021 after a net loss of $747 million in 2020 while the vaccines were in development. Pfizer’s 2021 profit margin on the vaccine was in the high 20% range and is expected to increase slightly in 2022, according to chief financial officer Frank D’Amelio. Pfizer shares vaccine benefits equally with partner BioNTech.
Pfizer’s vaccine, Comirnaty, and Moderna’s vaccine, Spikevax, have both received full Food and Drug Administration approval. The vaccines received emergency use approval in December 2020 after beginning rapid development in the spring of this year.
Pfizer remains by far the dominant vaccine in the United States and the European Union, the key markets for both companies. Some 58% of all Covid vaccines administered in the United States were from Pfizer and 37% were from Moderna, according to data from the Centers for Disease Control and Prevention. In the EU, 71% of all doses administered were from Pfizer, while 17% were from Moderna, according to Our World in Data.
Pfizer and Moderna both expect the pandemic to transition to an endemic phase where the virus is less disruptive to society. Jefferies analyst Michael Yee said he expects Moderna to have a strong year, but future demand is unclear as the unprecedented wave of omicron infections declines rapidly in many regions of the world.
“The market continues to debate the ultimate trajectory for strengthening demand in 2022 and for 2023 and beyond,” Yee told CNBC. “We have the feeling that we are coming out of a pandemic and more in an endemic where we have seen the peak behind us. »
Jefferies has a holding rating on shares of Moderna with a price target of $170. Moderna’s stock is down 42% year-to-date. It was trading around $148 on Thursday.
Moderna chief medical officer Paul Burton told analysts on the company’s earnings call last week that the northern hemisphere is entering a period of more stable new infections, hospitalizations and deaths. . Moderna’s main markets, the United States and Europe, are located in the northern hemisphere.
Burton said Covid will likely follow a seasonal pattern like other well-known respiratory viruses such as influenza. Although a majority of the population is unlikely to contract serious illness, the virus will still cause illness and death among vulnerable people. CEO Stéphane Bancel said people over 50 and those with health conditions will still need to get a Covid shot. Key markets are already gearing up for annual recalls, he said.
“Some countries like the UK and others wanted to secure supply because they deeply believe the endemic market will require annual boosters,” Bancel told analysts on the company’s earnings call.
Bancel also noted that Moderna’s $19 billion sales forecast for this year does not include any orders from the United States, which receives its last shipment in April and has not signed a contract for the fall. Moderna also has $3 billion in vaccine order options on top of its already signed deals.
Bancel said he expects a substantial portion of these options to be exercised by governments whether or not a new variant emerges, which could bring the company’s forecast for 2022 to at least $22 billion. dollars, not counting any American orders.
Children in the United States are not yet eligible for Moderna’s vaccine. Moderna’s vaccine for adolescents ages 12 to 17 is currently under review by the FDA. The company is waiting to file an application with the FDA to authorize its vaccine for ages 6 to 11 until vaccines for adolescents are authorized. Moderna expects data on the vaccine for children 5 and under this month.
As the market debates future demand for vaccines, not all analysts believe the world is rapidly moving towards an endemic phase. Investment bank Cowen thinks the endemic seasonal phase may not emerge for two years. If that is the case, Moderna’s current Covid vaccine will have longer and stronger demand than many expect, according to Cowen. Boosters that target Covid variants will be crucial moving forward, according to an analyst note.
“Omicron makes it painfully clear that we are not yet in the endemic seasonal phase and that variant-specific boosts may be more important than ever,” Cowen analyst Tyler Van Buren wrote in the note published last week after the benefits of Moderna. Cowen has a market performance rating on Moderna with a price target of $200.
Moderna announced last week that it was developing a booster that targets omicron and other known variants. Burton, the chief medical officer, said Moderna believes this recall will play a vital role in the future, as people will need protection against omicron as well as the old dominant delta variant, which continues to circulate around the world..
Moderna’s ultimate goal is to develop an annual booster that covers three major respiratory viruses – influenza, respiratory syncytial virus and of course Covid. The company’s candidate for a flu vaccine could enter phase three trials this year, and its RSV vaccine has already moved into phase three trials. Yee, analysts at Jefferies, said Moderna needs to demonstrate strong, clear data that shows a visible path to market for its other vaccines in development.
“That’s obviously hugely important because the Covid part becomes less critical as we move into an endemic period and incomes are likely to go down,” Yee said.
Moderna said its vision was to create a subscription model for a pan-respiratory vaccine with a 10-year supply of annual boosters, Bancel told analysts on the call. Moderna has memorandums of understanding with Canada and Australia, he said. Bancel previously said the company aims to have the vaccine ready by fall 2023 in some countries at best.
For Pfizer, analysts are focusing on the company’s Covid treatment pill, Paxlovid, as a major source of revenue in 2022. CEO Albert Bourla said during Pfizer’s earnings call last month that the pill The company’s antiviral drug, in addition to its vaccine, will equip countries to better manage the virus and move into the endemic phase.
Pfizer predicts sales of $22 billion this year for Paxlovid. Oral antiviral treatment has been shown to be 89% effective in preventing hospitalization in people at risk of severe Covid in clinical trials when given with a widely used anti-HIV drug. It received emergency clearance from the FDA in December.
During the company’s earnings call, Bourla said Paxlovid’s sales in 2022 could actually be well above forecasts, which only included deals signed or those being finalized. Angela Hwang, head of biopharmaceuticals at Pfizer, said Pfizer is in active discussions with more than 100 countries around the world on Paxlovid. Oral antiviral treatment has a higher profit margin than the vaccine, according to Pfizer CFO D’Amelio.
“Paxlovid also achieves a higher gross margin than Comirnaty, which makes any increase in Paxlovid sales more favorable to earnings,” Argus analyst David Toung wrote in a note last month. Argus has a Buy rating on Pfizer and has raised its price target to $65. Pfizer is down about 18% year-to-date. The stock was trading around $48 per share on Thursday.
Steve Scala, an analyst at Cowen, said on the earnings call that Pfizer’s outlook for Paxlovid was conservative. “It looks like Pfizer has only scratched the surface of its potential for 2022,” Scala said.
Pfizer is also developing a vaccine that targets omicron. Bourla said the vaccine should be ready this month, although he has noted in the past that it is unclear how or when the omicron vaccine will be used. Bourla has also said in the past that a fourth vaccine may be needed, but it’s important to wait for data from studies.
Pfizer’s vaccine for children under 5 is also awaiting approval. The FDA had sought to quickly approve the first two doses of the vaccine this month, but Pfizer delayed those plans after data showed significantly lower doses for young children weren’t as effective.. The drug regulator is now awaiting data on the third dose, which Pfizer expects in April.
In the United States, Pfizer’s vaccine is licensed for people ages 5 and older and fully approved for those ages 16 and older. Moderna’s vaccine is fully approved for adults 18 years and older.
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Pfizer and Moderna project $51 billion in combined vaccine sales this year – Reuters