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(CNN) – The imminent authorization of the Pfizer COVID-19 vaccine in the United States is a momentous occasion for science, economics and humanity. The milestone is also a major source of revenue for the companies that developed the vaccines.
Wall Street analysts project that Pfizer and Moderna will generate $ 32 billion in revenue from the COVID-19 vaccine, just next year.
That doesn’t take into account the goodwill boost these companies will receive in helping to end the worst pandemic in a century. That momentum is magnified for Moderna, a young biotech company few had heard of before 2020 and which may now be on the cusp of obtaining its own FDA clearance.
Pfizer alone is projected to generate $ 19 billion in revenue from the COVID-19 vaccine in 2021, according to Morgan Stanley. That adds up to an estimated $ 975 million in vaccine revenue in 2020.
Pfizer will split its revenue with BioNTech, the German company with which it partnered to develop the vaccine. An FDA advisory panel recommended Thursday that the agency grant an emergency use authorization to the candidate vaccine the couple developed. US officials have said they are working “quickly” to give the vaccine the green light.
The Pfizer vaccine was already licensed by the UK earlier this month.
Pfizer is expected to get $ 9.3 billion more in combined revenue from the COVID-19 vaccine in 2022 and 2023 as the world continues to get vaccinated, Morgan Stanley projected.
The vaccine advance has not caused a boom in Pfizer’s stock price because the drugmaker is already a large company. Pfizer shares are up just 12% this year, well below the overall gain of 13.5% for the S&P 500.
Still, Pfizer’s expected revenue in 2021 would far exceed the company’s best-selling product last year: a pneumonia vaccine that generated $ 5.8 billion in sales.
Though Pfizer’s shares have barely moved, partner BioNTech is booming – its U.S.-listed shares have soared nearly 300%, bringing the German biotech company’s valuation to nearly $ 30. billion.
Moderna had just $ 60 million in revenue last year
Meanwhile, Moderna’s COVID-19 vaccine candidate has already transformed a virtually unknown company into a $ 62 billion powerhouse. Shares have soared nearly 700% this year, and Morgan Stanley estimates that about half of the company’s market value is tied to the vaccine.
Moderna is expected to raise $ 13.2 billion in revenue from the COVID-19 vaccine next year, according to Goldman Sachs. Others are more optimistic. Morgan Stanley said Moderna’s rising share price means investors expect the company to raise between $ 10 billion and $ 15 billion from COVID-19 vaccine sales in both 2021 and 2022, followed by thousands. million more in sales of reinforcements.
These are staggering sums for a company that generated just $ 60 million in sales in 2019 and had never licensed a product before.
“It’s epic,” said Alan Carr, a biotech analyst at Needham. “It’s a historic achievement in drug development. It’s hard to imagine taking a new technology at such a young company and having it ready just in time for the worst pandemic in a century.”
Wall Street is very optimistic about Moderna’s portfolio
Both Pfizer and Moderna have released data indicating that their vaccine candidates are highly effective in preventing COVID-19, more than analysts had anticipated.
Investors believe the achievement validates Moderna’s mRNA technology, which seeks to harness normal biological processes to create a desired therapeutic effect. Wall Street now has much more confidence in the entire Moderna portfolio, betting that this won’t be the company’s only blockbuster.
Moderna’s coronavirus vaccine “demonstrated that the technology is safe and effective, unleashing the potential of other vaccines in the works,” Morgan Stanley analyst Matthew Harrison wrote in a recent note to clients.
More than a quarter of Moderna’s market value is now allocated to its other mRNA vaccines, estimates Morgan Stanley.
Now the big debate on Wall Street is how long COVID-19 vaccines will be a source of revenue for these companies. It is still unknown how long the treatments will provide protection and how often people will need to receive booster shots.
Harrison said it will take at least a few years of follow-up data to understand how effective the boosters are. During that time, public health officials are likely to encourage high-risk and elderly populations to increase, he said.
The profitability debate during a health crisis
Medical advances are likely to be a game changer for the struggling global economy, paving the way for the recovery of airlines, hotels, casinos, restaurants and other sectors decimated by the pandemic. Vaccines could eventually lead to the rehiring of millions of workers whose jobs were derailed during the health crisis.
Still, the tens of billions of dollars that Pfizer and Moderna can make from vaccines have drawn criticism for human suffering. The pandemic has killed nearly 300,000 people in the United States alone.
Rival drug makers Johnson & Johnson and AstraZeneca have promised that their vaccines will be available on a non-profit basis during the pandemic.
“It is absolutely wrong for pharmaceutical companies like Pfizer and Moderna to profit, and for their executives to make huge personal fortunes from COVID-19 vaccines that have been so heavily subsidized and supported by American taxpayers,” said Eli Zupnick, spokesperson for Accountable. .US, a progressive watchdog and patient advocacy group.
Neither Pfizer nor Moderna responded to requests for comment.
In a statement last month, Pfizer said its COVID-19 vaccine development and manufacturing costs “have been fully self-funded, with billions of dollars already invested at risk.”
“The company will continue to bear all development and manufacturing costs in an effort to help find a solution to this pandemic as quickly as possible,” Pfizer said at the time.
The role of the federal government
Although Pfizer did not accept money from Operation Warp Speed, the Trump administration’s vaccine initiative, the federal government agreed to pay $ 1.95 billion for the first 100 million doses. That deal served as a kind of safety net for Pfizer, providing the company with a lucrative guaranteed market if the FDA gave its blessing to the vaccine.
Moderna turned to the capital markets for financing. In May, the company raised $ 1.3 billion through the sale of shares. Some Moderna executives cashed in tens of millions of dollars in stock through pre-scheduled transactions that nonetheless drew the attention of former SEC officials.
Moderna also took a piece of taxpayer money to develop its vaccine candidate. The federal government awarded Moderna about $ 955 million in grants designed to support the development of the drug. Moderna also worked closely with government scientists to test its vaccine.
Carr, the Needham analyst, said the upcoming revenue from Moderna and Pfizer were motivating factors that helped make medical breakthroughs possible.
“There is nothing like an income stream to incentivize them,” he said.
This story was first published on CNN.com, “Pfizer and Moderna could get $ 32 billion in COVID-19 vaccine sales, in 2021 alone”
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