Have Pfizer and Moderna died of success? Now that Covid-19 seems to have ceased to be a problem for Western societies, the two pharmaceutical companies whose vaccines have made a return to normality possible are forced to refocus on other segments.
The story is well known to all. In mid-March 2020, the world economy was paralyzed by the strict lockdowns that governments had imposed to prevent the spread of Covid-19. At that time it was estimated that it could take two years to develop effective vaccines against the disease, which is why the relief was huge when just 10 months later mass vaccination programs began in the US and Europe.
The two big winners, Pfizer and Moderna, which, thanks to the high effectiveness of their messenger RNA vaccines, prevailed over other more conventional alternatives such as those developed by AstraZeneca o Janssen (Johnson & Johnson). The need to apply several doses to maintain immunity or deal with new variants of the coronavirus (such as omicron) triggered the sales of these vaccines. In total it is estimated that they have 5 billion doses have been administered worldwide.
Thus, the story of the success of vaccines against Covid-19 is practically the story of Moderna en Bolsa. The company went from being a minor player in the pharmaceutical sector to jumping into the big leagues. If in February 2020 it was listed at $25.93, just over a year later, on August 9, 2021, it reached a maximum of $484.47, multiplying its price by more than 18.
The alliance between Pfizer and BioNTech gave rise to the other great Western vaccine against the coronavirus, with an impact that was also noticeable on the stock market, although less abruptly than in the case of Moderna, also given the greater diversification of the pharmaceutical giant. In Pfizer, the all-time highs were reached on December 16, 2021 at a price of $61.52.
However, despite the fact that the Covid-19 vaccine has come to stay, the truth is that it is already beginning to take a backseat. Pfizer presented guidance for 2023 last week showing that it expects sales of its vaccine against Covid-19 of 13.5 billion dollars in 2023, well below the 37.8 billion it generated in 2022.
Moderna’s vaccine is expected to generate revenue of $18.1 billion in 2022 and $7.3 billion in 2023, according to the FactSet consensus. The company will present its results for the fourth quarter of the year on February 23.
These lower prospects have been noted in the price of both pharmaceuticals. The actions of Moderna are currently 65% below their 2021 highs, although its levels around $127 are still five times the levels prior to Covid-19. At Pfizer, the drop from highs is less than 30%, and it is not too different from that suffered by most of Wall Street after the difficult 2022.
The golden age of vaccines
Experts also see considerable upside potential in both companies. According to data compiled by Reuters, on average analysts give a ‘buy’ recommendation to Moderna with a target price of 226.64 euros, 33% above the current price. Pfizer’s potential is somewhat lower, down 20% to a valuation of $52.77. The middle advice is also to ‘buy’.
And it is that pharmaceuticals have not stood still after the success of their Covid vaccines. Without going into other drugs – before the coronavirus Pfizer was well known thanks to Viagra – messenger RNA technology opens the way to a new golden age of vaccines.
For now, both companies seem to also become direct competitors to stop the respiratory syncytial virus (VRS). The two have published the results of RSV vaccine trials with efficacy results strong enough to await accelerated approval from the FDA, the US regulator.
RSV has never had a vaccine and cases have been on the rise. In fact, last fall season was especially bad in the US among both children and the elderly, which has increased attention for this disease, which is usually mild.
But it’s just one part of a sprawling vaccine industry for these two companies. Formulas being developed will include not only a combined vaccine against Covid and seasonal flu in a single dose, but also potentially from RSV combined with other vaccines as well in one dose. Pfizer alone plans to launch 19 products in the next year and a half alone.
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