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The vials with Pfizer-BioNTech and Moderna anti-coronavirus labels (COVID-19) are shown in this illustration, taken on 19 March 2021.
Dado Ruvic Reuters
Pfizer in Modern they expect $ 51 billion in total vaccine sales next year, although the omicron wave is easing dramatically in many parts of the world and both companies believe the pandemic is moving to an endemic phase where the virus will be less disruptive to society.
Pfizer expects $ 32 billion in Covid vaccine sales for 2022, while Moderna they predict at least $ 19 billion on sale, companies said in their fourth-quarter profit reports released last month.
These are minimum sales that reflect the contracts that countries around the world have already signed and anticipate the need for this year. However, they can be much higher, depending on the path of the virus. Pfizer has just raised its guidelines for Covid sales by 2022 by $ 1 billion from a previous forecast given to investors in the third quarter, while Moderna has raised its guidelines by $ 2 billion.
The expectations of companies for 2022 come after they generated large revenues from provisions in the first full year of the introduction of the Covid vaccine. Pfizer sold $ 36.7 billion of its Covid vaccine worldwide in 2021, accounting for 45% of its total annual revenue of $ 81.2 billion. Modern’s vaccine is its only commercially available product, and $ 17.7 billion in sales in 2021 actually represents all of its $ 18.5 billion in annual revenue.
Profitable shots
Vaccine manufacturers are making big profits from their injections. Moderna has risen to profitability since the introduction of the vaccine, reporting $ 12.2 billion in net profit for 2021 after a net loss of $ 747 million in 2020, while vaccines were in development. According to CFO Frank D’Amelia, Pfizer’s 2021 profit rate for the vaccine was in the high 20% range and is expected to increase slightly in 2022. Pfizer shares the profits from the vaccine with its partner BioNTech.
Pfizer vaccine, Comirnatyin Moderna’s, Spikevax, both received full approval from the Food and Drug Administration. The vaccines were approved for emergency use in December 2020, after rapid development began in the spring of the same year.
Pfizer remains by far the dominant vaccine in both the US and the European Union, key markets for both companies. About 58% of all Covid injections given in the United States were Pfizer and 37% were Modern, according to the Centers for Disease Control and Prevention. In the EU, 71% of all doses were Pfizer and 17% Moderna, according to Our world in data.
Pfizer and Moderna expect the pandemic to move to an endemic phase where the virus is less disruptive to society. Michael Yee, an analyst at Jefferies, said he expects Moderna to have a strong year, but future demand is unclear as a wave of unprecedented omicron infection is rapidly declining in many parts of the world.
“The market continues to discuss the final path of demand to increase in 2022 and for 2023 and beyond,” Yee told CNBC. “There’s a sense that we’re working to get out of the pandemic and more into the endemic, where we’ve seen the climax behind us.”
Modern endemic plans
Jefferies has a Holder share rating with a target price of $ 170. Moderna shares have fallen 42 percent to date. About $ 148 was traded on Thursday.
Moderna CEO Paul Burton told analysts during a earnings call last week that the northern hemisphere is moving into a period when new infections, hospitalizations and deaths are more stable. The key markets of Modern, the US and Europe, are located in the northern hemisphere.
Burton said Covid is likely to follow a seasonal pattern like other well-known respiratory viruses such as the flu. Although the majority of the population will not be susceptible to serious diseases, the virus will still cause illness and death among the vulnerable. CEO Stephane Bancel said people over the age of 50 and those with health problems will still need to be vaccinated against Covid. Key markets are already preparing for annual reinforcements, he said.
“Some countries, such as the UK and others, have wanted to provide supply because they deeply believe that an endemic market will require annual stimulus,” Bancel told analysts during a call for earnings for the company.
Bancel also noted that the $ 19 billion sale forecast for Moderna for this year does not include any orders from the U.S., which receives its last shipment in April and has not yet signed a contract for the fall. In addition to the agreements already signed, Moderna also has the option of ordering a vaccine for $ 3 billion.
Bancel said he expects many of these options to be implemented by governments, whether or not a new version emerges that could increase the company’s 2022 guidelines to at least $ 22 billion, not including possible U.S. orders. .
Children in the U.S. are not yet eligible for the Modern vaccine. The FDA is currently reviewing Modern’s injection for teens ages 12 to 17. The company is waiting to apply to the FDA for approval of a vaccine for children ages 6 to 11 until vaccinations for teenagers are approved. Vaccine data for children 5 years of age and younger are expected in Moderna this month.
While the market is debating future demand for vaccines, not all analysts believe the world is moving rapidly toward an endemic phase. Cowen Investment Bank believes the endemic seasonal phase may not occur for another two years. If so, According to Cowen, the current modern Covid vaccine will have longer and higher demand than many expect. According to the analyst, amplifiers targeting versions of Covid will be key to progress.
“Omicron is painfully obvious that we are not yet in an endemic seasonal phase and that variation-specific increases may now be more important than ever,” Cowen analyst Tyler Van Buren wrote in a note released last week after Modern’s earnings. Cowen has a market performance estimate on Moderna with a target price of $ 200.
Moderna announced last week that it is developing an amplifier that targets omicron and other known versions. Burton, chief physician, said Moderna believes this amp will play a key role in progress as people will need protection from the omicron, as well as from the previous dominant version of the delta, which continues to circulate around the world..
Moderna’s ultimate goal is to develop an annual booster that covers the three main respiratory viruses – influenza, respiratory syncytial virus and, of course, Covid. The company’s candidate for the flu vaccine could enter the third phase of testing this year, and its RSV vaccine has already passed the third phase of testing. Yee, Jefferies analysts, said Moderna needs to show strong and clear data showing a visible path to market for its other developing vaccines.
“Obviously it’s very important because part of Covid becomes less critical as we move into an endemic period and revenue is likely to decline,” Yee said.
Moderna said her vision is to create a subscription model for a panrespiratory vaccine with a 10-year supply of annual boosters, Bancel told analysts during the tender. Moderna has memoranda of understanding with Canada and Australia, he said. Bancel told the company earlier plans to have the vaccine ready by autumn 2023 in some countries at best.
All eyes are on Pfizer’s Covid treatment
For Pfizer, analysts are focusing on the Covida pill, Paxlovid, as the main source of revenue in 2022. CEO Albert Bourla said during Pfizer’s earnings call last month that the company’s antivirus pill will equip countries with better vaccines to control the virus and transition into the endemic phase.
Pfizer plans to sell Paxlovid for $ 22 billion this year. Oral antiviral therapy has been shown to be 89% effective in preventing hospitalization in clinical trials in people at risk of severe Covid infection when given with a widely used anti-HIV drug. He received extraordinary FDA approval in December.
During the company’s earnings call, Bourla said that sales of Paxlovid in 2022 could actually be much higher than guidelines that included only signed deals or those close to completion. Angela Hwang, head of Pfizer’s biopharmaceuticals, said Pfizer is in active discussions with more than 100 countries around the world about Paxlovid. According to Pfizer CFO D’Amelio, oral antiviral treatment has a higher profit margin than vaccine.
“Paxlovid also has a higher gross margin than Comirnaty, making any increase in Paxlovid sales more favorable to earnings,” Argus analyst David Toung wrote last month. Argus has an estimate of a purchase from Pfizer and has raised its target price to $ 65. Pfizer has fallen about 18 percent to date. The stock traded around $ 48 a share on Thursday.
Steve Scala, a Cowen analyst, said during the earnings call that Pfizer’s guidelines on Paxlovid were conservative. “Pfizer just seems to have scratched the surface about its potential for 2022,” Scala said.
Pfizer is also developing a vaccine that targets omicron. Bourla said the injection should be ready this month, although he had noted in the past that it was not clear how and when omicron would be used. Bourla has also said in the past that a fourth shot may be needed, but it is important to wait for data from studies.
Pfizer’s vaccine for children under 5 is also awaiting registration. The FDA tried to approve the first two doses of injection quickly this month, but Pfizer postponed those plans after data showed that significantly lower doses for young children were not as effective.. The drug regulator is now awaiting data on the third dose, which Pfizer expects in April.
In the US, the Pfizer vaccine is approved for people 5 years of age and older and fully approved for people 16 years of age and older. Modern vaccine is fully approved for adults 18 years of age and older.
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