S&P 500   4,574.79
DOW   35,756.88
QQQ   379.12
S&P 500   4,574.79
DOW   35,756.88
QQQ   379.12
S&P 500   4,574.79
DOW   35,756.88
QQQ   379.12
S&P 500   4,574.79
DOW   35,756.88
QQQ   379.12

COVID-19 vaccine boosters could mean billions for drugmakers

Saturday, September 25, 2021 | Tom Murphy, AP Health Writer


In this March 2021 photo provided by Pfizer, a technician works on a line for packaging preparation for the Pfizer-BioNTech COVID-19 vaccine at the company's facility in Puurs, Belgium. Billions more in profits are at stake for some vaccine makers as the U.S. moves toward dispensing COVID-19 booster shots to shore up Americans' protection against the virus. (Pfizer via AP)

Billions more in profits are at stake for some vaccine makers as the U.S. moves toward dispensing COVID-19 booster shots to shore up Americans' protection against the virus.

How much the manufacturers stand to gain depends on how big the rollout proves to be.

U.S. health officials late on Thursday endorsed booster shots of the Pfizer vaccine for all Americans 65 and older — along with tens of millions of younger people who are at higher risk from the coronavirus because of health conditions or their jobs.

Officials described the move as a first step. Boosters will likely be offered even more broadly in the coming weeks or months, including boosters of vaccines made by Moderna and Johnson & Johnson. That, plus continued growth in initial vaccinations, could mean a huge gain in sales and profits for Pfizer and Moderna in particular.

“The opportunity quite frankly is reflective of the billions of people around the world who would need a vaccination and a boost,” Jefferies analyst Michael Yee said.

Wall Street is taking notice. The average forecast among analysts for Moderna’s 2022 revenue has jumped 35% since President Joe Biden laid out his booster plan in mid-August.

Most of the vaccinations so far in the U.S. have come from Pfizer, which developed its shot with Germany’s BioNTech, and Moderna. They have inoculated about 99 million and 68 million people, respectively. Johnson & Johnson is third with about 14 million people.

No one knows yet how many people will get the extra shots. But Morningstar analyst Karen Andersen expects boosters alone to bring in about $26 billion in global sales next year for Pfizer and BioNTech and around $14 billion for Moderna if they are endorsed for nearly all Americans.

Those companies also may gain business from people who got other vaccines initially. In Britain, which plans to offer boosters to everyone over 50 and other vulnerable people, an expert panel has recommended that Pfizer’s shot be the primary choice, with Moderna as the alternative.

Andersen expects Moderna, which has no other products on the market, to generate a roughly $13 billion profit next year from all COVID-19 vaccine sales if boosters are broadly authorized.

Potential vaccine profits are harder to estimate for Pfizer, but company executives have said they expect their pre-tax adjusted profit margin from the vaccine to be in the “high 20s” as a percentage of revenue. That would translate to a profit of around $7 billion next year just from boosters, based on Andersen’s sales prediction.

J&J and Europe’s AstraZeneca have said they don’t intend to profit from their COVID-19 vaccines during the pandemic.

For Pfizer and Moderna, the boosters could be more profitable than the original doses because they won’t come with the research and development costs the companies incurred to get the vaccines on the market in the first place.

WBB Securities CEO Steve Brozak said the booster shots will represent “almost pure profit” compared with the initial doses.

Drugmakers aren’t the only businesses that could see a windfall from delivering boosters. Drugstore chains CVS Health and Walgreens could bring in more than $800 million each in revenue, according to Jeff Jonas, a portfolio manager with Gabelli Funds.

Jonas noted that the drugstores may not face competition from mass vaccination clinics this time around, and the chains are diligent about collecting customer contact information. That makes it easy to invite people back for boosters.

Drugmakers are also developing COVID-19 shots that target certain variants of the virus, and say people might need annual shots like the ones they receive for the flu. All of that could make the vaccines a major recurring source of revenue.

The COVID-19 vaccines have already done much better than their predecessors.

Pfizer said in July it expects revenue from its COVID-19 vaccine to reach $33.5 billion this year, an estimate that could change depending on the impact of boosters or the possible expansion of shots to elementary school children.

That would be more than five times the $5.8 billion racked up last year by the world’s most lucrative vaccine — Pfizer’s Prevnar13, which protects against pneumococcal disease.

It also would dwarf the $19.8 billion brought in last year by AbbVie’s rheumatoid arthritis treatment Humira, widely regarded as the world’s top-selling drug.

This bodes well for future vaccine development, noted Erik Gordon, a business professor at the University of Michigan.

Vaccines normally are nowhere near as profitable as treatments, Gordon said. But the success of the COVID-19 shots could draw more drugmakers and venture capitalists into the field.

“The vaccine business is more attractive, which, for those of us who are going to need vaccines, is good," Gordon said.

___

Follow Tom Murphy on Twitter: https://twitter.com/thpmurphy

___

The Associated Press Health and Science Department receives support from the Howard Hughes Medical Institute’s Department of Science Education. The AP is solely responsible for all content.

Should you invest $1,000 in Pfizer right now?

Before you consider Pfizer, you'll want to hear this.

MarketBeat keeps track of Wall Street's top-rated and best performing research analysts and the stocks they recommend to their clients on a daily basis. MarketBeat has identified the five stocks that top analysts are quietly whispering to their clients to buy now before the broader market catches on... and Pfizer wasn't on the list.

While Pfizer currently has a "Hold" rating among analysts, top-rated analysts believe these five stocks are better buys.

View The 5 Stocks Here

 


Companies Mentioned in This Article

CompanyMarketRank™Current PricePrice ChangeDividend YieldP/E RatioConsensus RatingConsensus Price Target
Johnson & Johnson (JNJ)2.8$165.75+1.0%2.56%24.92Buy$189.75
Pfizer (PFE)2.8$43.56+1.0%3.58%18.70Hold$44.00
Compare These Stocks  Add These Stocks to My Watchlist 

Resources

Premium Research Tools

MarketBeat All Access subscribers can access stock screeners, the Idea Engine, data export tools, research reports, and other premium tools.

Discover All Access

Market Data and Calendars

Looking for new stock ideas? Want to see which stocks are moving? View our full suite of financial calendars and market data tables, all for free.

View Market Data

Investing Education and Resources

Receive a free world-class investing education from MarketBeat. Learn about financial terms, types of investments, trading strategies and more.

Financial Terms
Details Here
MarketBeat - Stock Market News and Research Tools logo

MarketBeat empowers individual investors to make better trading decisions by providing real-time financial data and objective market analysis. Whether you’re looking for analyst ratings, corporate buybacks, dividends, earnings, economic reports, financials, insider trades, IPOs, SEC filings or stock splits, MarketBeat has the objective information you need to analyze any stock. Learn more about MarketBeat.

MarketBeat is accredited by the Better Business Bureau

© American Consumer News, LLC dba MarketBeat® 2010-2021. All rights reserved.
326 E 8th St #105, Sioux Falls, SD 57103 | U.S. Based Support Team at [email protected] | (844) 978-6257
MarketBeat does not provide personalized financial advice and does not issue recommendations or offers to buy stock or sell any security.

Our Accessibility Statement | Terms of Service | Do Not Sell My Information

© 2021 Market data provided is at least 10-minutes delayed and hosted by Barchart Solutions. Information is provided 'as-is' and solely for informational purposes, not for trading purposes or advice, and is delayed. To see all exchange delays and terms of use please see disclaimer. Fundamental company data provided by Zacks Investment Research.