Billions in profits are at stake for some vaccine makers as the United States moves toward distributing COVID-19 booster shots to increase US defenses against the virus.
How much profit a manufacturer can make depends on how large the deployment is.
Exactly who should get the booster was a controversial decision as the Centers for Disease Control and Prevention advisory spent two days this week considering the evidence. CDC Director Dr. Rochelle Valensky approved most of his options. People over 65 years of age, nursing home residents, and people aged 50 to 64 with chronic health problems such as diabetes should be given a final dose of Pfizer after 6 months. I have. People over the age of 18 who have health problems can decide for themselves whether they need a booster.
Still, the crisis continues to evolve, and some top US health officials expect boosters to become more widely accepted in the coming weeks or months. And, in addition, the continued growth of early vaccinations could mean significant increases in sales and profits, especially for Pfizer and Moderna.
“This opportunity, clearly, reflects the need to vaccinate and promote those billions of people around the world,” said Jefferies analyst Michael Yee.
Wall Street is paying attention. Analysts’ average forecast for 2022 earnings at Modana has risen 35% since President Joe Biden announced the booster plan in mid-August.
Most of the vaccinations so far in the United States have come from Pfizer and Moderna, which developed the shots at BioNTech in Germany. They vaccinated about 99 million and 68 million, respectively. Johnson & Johnson is in third place with about 14 million people.
No one yet knows how many people will get the extra shots. However, Morningstar analyst Karen Anderson said Booster alone will generate about $26 billion in global sales for Pfizer and BioNTech next year, and about 140 if Moderna’s sales are approved by nearly all Americans. Expected to be $100 million.
Those companies can also get business from people who have had other vaccines before. In the UK, which plans to provide boosters to all people over the age of 50 and other vulnerable people, a panel of experts recommends Pfizer’s shots as the first choice and Moderna instead. Work.
Anderson predicts that if the boosters are widely licensed, Moderna, like no other product on the market, will generate about $13 billion in profit from sales of all COVID-19 vaccines next year.
While it’s difficult to forecast Pfizer’s potential vaccine profits, company officials said they expect pre-tax adjusted profit margins from vaccines as a percentage of revenue to be in their “late 20s.” Boosters alone will generate about $7 billion in profits next year, based on Anderson’s forecast.
J&J and AstraZeneca in Europe have said they do not intend to benefit from the COVID-19 vaccine during the pandemic.
In the case of Pfizer and Moderna, boosters may be more profitable than original doses because they do not cover the R&D costs incurred by the company to first bring the vaccine to market.
Steve Brozak, CEO of WBB Securities, said the booster shots represent an “almost net benefit” compared to the starting dose.
It’s not only pharmaceutical companies that could see a decline because of booster offerings. According to Jeff Jonas, portfolio manager at Gabelli Funds, drugstore chains CVS Health and Walgreens could each generate more than $800 million in revenue.
Jonas said drugstores may not face competition with mass vaccination clinics this time around, and the chain is eager to collect customer contact information. This makes it easy to invite people for boosters.
Pharmaceutical companies are also developing COVID-19 shots that target specific types of the virus, it said, adding that people may need annual shots to get the flu. All these have the potential to make vaccines a major source of recurring income.
The COVID-19 vaccine is far better than the previous vaccines.
Pfizer said in July that it expected revenue from the COVID-19 vaccine to reach $33.5 billion this year. This can vary depending on the effect of the booster and the possibility of increased injections in elementary school.
That’s five times more than the $5.8 billion Pfizer’s Prevnar 13 raised last year to protect against pneumococcal infections, the world’s most profitable vaccine.
It would also reduce the $19.8 billion brought in last year by AbbVie’s rheumatoid arthritis drug Fumira, widely recognized as the world’s best-selling drug.
Eric Gordon, a business professor at the University of Michigan, said it was a harbinger of future vaccine development.
According to Gordon, vaccines are not usually beneficial as a treatment. However, the success of COVID-19 shots has the potential to attract more pharmaceutical companies and venture capitalists to the region.
“The vaccine business is more attractive to us and good for our need for vaccines,” Gordon said.
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