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Modern (NASDAQ: mRNA) and Pfizer (NYSE: PFE) They made history when they brought their coronavirus vaccines from development to market in less than a year. So far, however, Moderna has been the only one to benefit from the stock price outlook. The company’s shares soared more than 600% this year. Pfizer shares have changed little.
Why so much difference? Investors knew that an eventual vaccine would be Moderna’s first marketed product and therefore its source of product revenue. In contrast, Pfizer’s future did not depend on the vaccine program. That’s because the big pharmaceutical company generates revenue from a wide range of products.
We have now entered a new phase. Moderna and Pfizer launched their vaccines this month with emergency clearances. Let’s take a look at which company can win in terms of income and stock performance.
Image source: Getty Images.
UK, US and European clearances
Pfizer and partner BioNTech It was licensed in the UK, then the US and more recently the European Union. The pharmaceutical company has orders for at least 550 million doses from various countries and regions, including the United States, the European Union, the United Kingdom, and others. The number does not include Canada, which ordered doses but did not announce how many.
Pfizer has not released how much it is charging, but we can use the price the United States paid as a guide. That’s $ 1.95 billion per 100 million doses, or $ 19.50 per dose. For the doses ordered so far, that works out to more than $ 10 billion. Pfizer must also share some of its profits with BioNTech.
Let’s take a look at Moderna. The US Food and Drug Administration (FDA) granted an Emergency Use Authorization for Moderna’s vaccine last week. Biotechnology has obtained orders for more than 470 million doses from the United States, the European Union, Canada, Switzerland and other countries. Like my count from Pfizer, this does not include countries that have not announced the requested quantities. In this case, that means Singapore and Qatar.
We’ll use the price the United States paid again to give us a rough estimate of revenue, and that’s $ 1.5 billion for $ 100 million doses, or $ 15 per dose. That means more than $ 7 billion in revenue for the doses ordered so far. One point to keep in mind is that Moderna has priced smaller orders at $ 32- $ 37 per dose, so revenue could increase further.
There are a few other points to consider. First, it is clear that companies will not generate those levels of income overnight. Moderna aims to make up to 125 million doses available in the first quarter. So in the short term, the revenue can be just under $ 2 billion.
Pfizer said it can supply up to 50 million doses this year and 1.3 billion doses by the end of next year. So it can generate around $ 975 million by the end of this year.
Box office success levels
Still, Moderna and Pfizer can quickly reach the blockbuster level of $ 1 billion in sales of their coronavirus vaccines. And that is significant.
From a revenue perspective, regardless of other factors, companies can be on par. But a logistical factor is also part of the picture. I’m talking about transportation and storage. In this area, Moderna gets more points.
Moderna vaccine can be transported and stored at standard refrigerator temperatures. It can even be left at room temperature for up to 12 hours. Pfizer requires ultra-low temperatures, so countries and health systems that want to provide Pfizer’s vaccine must invest in special freezers.
Freezer costs range from $ 5,000 to $ 15,000. That greatly increases the overall budget for vaccination. And Stat News reports that Pfizer’s minimum order requirement is higher than Moderna’s: 975 doses versus 100 doses. Temperature and low-order factors are likely to make it difficult or impossible for many small healthcare settings to consider the Pfizer vaccine.
What does this mean for companies and their investors?
In the first weeks of the vaccine launch, the world needs all the vaccine it can get. As you can see from the numbers above, both companies do not immediately have the production capacity to fulfill all orders. Even if Pfizer’s vaccine poses logistical challenges, countries and healthcare settings will do their best to adapt.
But once initial orders are completed and both companies reach full production, Moderna is likely to emerge as a leader. Transportation and storage requirements mean that Pfizer’s vaccine will cost countries far more than just the price of doses. Governments will take this into account when deciding to place their next orders.
When it comes to share prices, Moderna also has more to gain. Investors will closely monitor the revenue from this first and only product in the coming quarters. If it meets or exceeds expectations, the stock in this biotech company may be on its way to another winning year.
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