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As 2020 draws to a close, all eyes are open Pfizer (NYSE: PFE) and Modern (NASDAQ: mRNA). The two companies have been working throughout the year to create vaccines against the new coronavirus that has claimed nearly 1.6 million lives worldwide.
On December 11, Pfizer received an Emergency Use Authorization (US) from the US Food and Drug Administration (FDA). Pfizer’s coronavirus candidate BNT162b2 is based on messenger RNA (mRNA) technology and was developed with its German biotech partner. BioNTech (NASDAQ: BNTX). The candidate showed 95% efficacy in the ongoing phase 3 trial.
Meanwhile, Moderna’s mRNA vaccine candidate, mRNA-1273, reported an efficacy rate of 94.1%. Moderna received an EUA on December 18, just one day after the agency’s advisory committee unanimously recommended authorization for the vaccine.
Both companies that receive final regulatory approval will help in the global battle against COVID-19. However, how good will your success be for your competing stocks?
Image source: Getty Images.
Pfizer is a pioneer in coronavirus vaccines, but has more to offer
After receiving its USA from the FDA, Pfizer immediately began distributing doses of its vaccine candidate in the US More than 550,000 Americans were vaccinated in the first full week of distribution. More good news came from across the pond this week, when the European Medical Agency and the European Commission authorized the injection within hours of each other.
Pfizer has an agreement with the US government to supply 100 million doses of the vaccine for $ 1.95 billion, with the option to provide another 500 million doses. The company also has agreements with other countries. Globally, Pfizer and BioNTech aim to manufacture and supply 50 million doses by 2020 and up to 1.3 billion doses by the end of 2021.
Whether or not Pfizer’s coronavirus vaccine is successful would not affect the company’s business. It is already a safe pharmaceutical company, with strong revenues from its core businesses of various approved drugs with growing sales. Its popular revenue-boosting drugs include the breast cancer drug Ibrance, the arthritis treatment Xeljanz, and Eliquis, which treats blood clots and helps prevent strokes. For the full year of 2019, Pfizer’s total revenue was $ 51.8 billion.
As reported by CNN, according to estimates by Morgan Stanley, Pfizer could generate $ 19 billion in revenue in 2021 from its coronavirus vaccine. This is in addition to the estimated $ 975 million from 2020 alone, as Pfizer plans to supply 500 million doses by the end of the year. However, Pfizer will have to split COVID-19 vaccine revenue 50-50 with BioNTech.
Moderna is a growing stock, what else do you have in the works?
Receiving an EUA for its coronavirus vaccine is undoubtedly good news for Moderna, since its future depends largely on the success of this vaccine (and its technology). Its phase 3 trial known as the COVE study is still ongoing, gathering evidence to support a full FDA approval. Moderna has promised to supply 20 million doses to the US before the end of 2020, and could manufacture 500 million to 1 billion doses globally in 2021.
Like Pfizer, government orders for mRNA-1273 are already through the roof. On December 11, the United States government exercised its option for 200 million more doses. You still have the option to buy an additional 300 million, if necessary. On November 25, Moderna announced that the European Commission also had the option of receiving between 80 million and 160 million additional doses of mRNA-1273.
On November 29, Moderna signaled an amendment to its agreement with the UK government to supply an additional 2 million doses, for a total of 7 million doses of 1273 mRNA. Like Pfizer, Moderna also has supply agreements with other countries.
The stakes are high in these offers. That’s because, unlike Pfizer, Moderna doesn’t yet have an approved vaccine in its portfolio. Moderna plans to charge around $ 25 to $ 37 per dose on its two-dose schedule, while Pfizer plans to charge $ 19.50 per dose. If Moderna manages to sell 500 million doses in 2021 (that’s the low end of its projections), it could generate at least $ 12.5 billion in revenue from mRNA-1273.
Revenue from its COVID-19 vaccine over the next three years could create a stable cash reserve for the company, driving research and development of other products in its portfolio. Moderna currently has 21 clinical candidates in development. His clinical trials of vaccines against cytomegalovirus, Zika virus and various types of cancer have caught the attention of investors. But if your coronavirus vaccine proves ineffective, shows serious side effects, or doesn’t receive full approval, your stock could collapse.
The mRNA technology that was used to create mRNA-1273 is also the basis for many of Moderna’s other potential treatments currently in development. Pfizer and BioNTech’s mRNA-based COVID-19 vaccine candidate, BNT162b2, uses the same technology. Like Pfizer-BioNTech and Moderna vaccines making their way to market, could attract a lot of attention and confidence in Moderna’s approach to drug development with mRNA.
Image source: Getty Images.
It doesn’t end there
To determine the success of candidate vaccines, they must be tested globally; that’s where logistics comes into play. In terms of distribution, Moderna has the advantage, as its vaccine candidate, mRNA-1273, can be stored at normal refrigeration temperatures for a month. The Pfizer candidate must be kept below 94 degrees Fahrenheit to remain stable for more than five days. To overcome that temperature hurdle, both companies have designed temperature controlled conveyors. These containers will maintain the temperature for 10 days unopened, allowing for greater ease of global transportation.
A new danger looming over potential vaccines is the discovery of a more infectious strain of SARS-CoV-2 in the UK. According to Reuters, scientists believe that this new variant is between 40% and 70% more transmissible; It has not yet been determined how effective the Pfizer-BioNTech, Moderna or any other COVID-19 vaccine will be against it. Investors in coronavirus should keep a close eye on new strains and mutations, which could make current vaccines less effective or even ineffective.
Considering the pros and cons of these coronavirus biotech stocks, Moderna emerges as a good option for aggressive investors who still want to line their pockets with some short-term gains. Moderna’s shares are up 542% year-to-date, while Pfizer shares are up 0.9%. the S&P 500 it has gained 16% during the same period.
But looking at the bigger picture, Pfizer, with its sustainable diversified business and growth strategies, looks like a still lucrative but less risky investment opportunity in the long run.
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