There is a US company that is developing a new candidate for the coronavirus vaccine that has probably been in the headlines more than any other. Modern (NASDAQ: MRNA) It made waves earlier this year with its rapid development of a COVID-19 vaccine candidate using messenger RNA (mRNA). The mRNA stimulates the ribosomes to generate antigens that are like the spike protein in SARS-CoV-2 (the new coronavirus), then the body responds by producing antibodies against it.
Moderna quickly established itself as a leader in the race to develop a COVID-19 vaccine. As a result, its shares have skyrocketed, more than quadruple so far this year.
But a much larger drug maker also has a mRNA-based COVID-19 candidate vaccine. Pfizer (NYSE: PFE) associated with German biotechnology BioNTech (NASDAQ: BNTX) in March due to the promise of its BNT162 program. Don’t be surprised if Pfizer becomes a bigger coronavirus winner than Moderna.
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Running neck and neck
One reason that Moderna has received so much attention is that its COVID-19 vaccine candidate, mRNA-1273, advanced rapidly through clinical studies. A phase 1 study conducted by the National Institutes of Health dosed its first participant on March 16. The Moderna phase 2 study of the mRNA-1273 began in late May. Biotechnology started a phase 3 study earlier this week.
Pfizer and BioNTech were more than a month behind Moderna in starting clinical trials of four COVID-19 vaccine candidates, and the first participants in a phase 1/2 study conducted in Germany received on April 29. It started a phase 1/2 study in the US next week.
But Pfizer has now almost caught up with Moderna. The large drug maker and its smaller German partner announced Tuesday this week that the COVID-19 vaccine candidate BNT162b2 is advancing to phase 2/3 clinical trials.
More importantly, Pfizer and BioNTech could have late results at approximately the same time as Moderna. The two companies stated that “they hope to be ready to seek Emergency Use Authorization or some form of regulatory approval from October 2020.” That is in line with public statements made by Moderna CEO Stephane Bancel, who recently said that the final results of mRNA-1273 could be released in October or November.
Far ahead
Pfizer is way ahead of Moderna in other ways.
Moderna is on track to be able to produce around 500 million doses of its COVID-19 vaccine annually starting in 2021. It believes this level could be increased to 1 billion doses per year, but Moderna relies on third parties to help boost its capacity. of production.
Meanwhile, Pfizer and BioNTech hope to deliver up to 100 million doses by the end of this year, assuming BNT162b2 gets the authorization or approval. The companies aim to produce around 1.3 billion doses by the end of 2021.
Until now, Moderna has received substantial funds from the United States government. However, biotechnology has yet to establish a supply agreement in the US or in any other country.
How about Pfizer? It recently struck a massive deal with the United States government to supply an initial order for 100 million doses of its COVID-19 vaccine for $ 1.95 billion. There is also an option in the agreement for the United States to buy another 500 million doses.
In addition, Pfizer signed an agreement with the United Kingdom to supply 30 million doses of its COVID-19 vaccine in an undisclosed amount. The US and UK agreements depend on the approval or authorization of the coronavirus vaccine developed by Pfizer and BioNTech.
Different types of winning
It’s not hard to imagine Pfizer becoming a bigger winner with BNT162b2 than Moderna will be with mRNA-1273. Pfizer’s increased production capacity and large existing supply agreements give it distinctive advantages. There is also a possibility that BNT162b2 may have a better safety profile than mRNA-1273, although we will not know for sure until the final stage results are available to both vaccine candidates.
However, there are different types of winning. Even if BNT162b2 is more commercially successful than mRNA-1273 (again, assuming both vaccine candidates get approval), Moderna could still beat Pfizer in terms of stock performance. A biotech stock like Moderna, with a market capitalization of around $ 32 billion, would have much more room to operate than a large pharmaceutical stock like Pfizer, with a market capitalization of close to $ 220 billion.
Also note that Moderna owns all rights to mRNA-1273. Pfizer gave BioNTech a down payment of $ 185 million and made a capital investment of about $ 113 million in German biotechnology. You may need to pay BioNTech up to $ 563 million in milestone payments. Details on how BNT162b2 sales and profits would be divided between the two partners were not announced. The bottom line is that Pfizer will not pocket all the money that BNT162b2 could earn if approved.
However, even with these caveats, Pfizer should make a lot of money if BNT162b2 succeeds in late-stage testing. And with a merger of its growth-struggling Upjohn unit with Mylan Likely to end in the fourth quarter of 2020, the big drug maker could soon become a bigger winner than it has been in a long time.
