Vaccine Mandates Could Be Good News for Vaccine Makers
Mandates for Covid-19 vaccination have started dotting the map, as businesses and governmental units across the country try to stem the spike in cases spread by the virus’s contagious Delta variant.
At the same time, research is concluding that the protection from vaccination starts to taper after several months, boosting the case for booster shots. All this makes Covid vaccine sales look like a long-term business for
(MRNA), and other producers.
(WMT) and Walt Disney (DIS) said they’d require shots for many employees. Similar employee mandates have been set by businesses like
(UBER), as well as the governments of New York City and California. On Thursday, President Joe Biden mandated shots—or frequent tests—for certain federal employees, which could soon include most of the military.
Mandates for use of a product aren’t a bad thing for its sales. On Wednesday, Pfizer reported robust June quarter revenue from its Covid vaccine. Moderna will report on Aug. 5 and BioNTech on Aug. 8.
Johnson & Johnson
((AZN)) expect to book billions of dollars each in Covid vaccine sales this year. Initially, neither of the two firms priced their shots to make profits, but they plan to raise prices. And clinical trial results suggest that
(NVAX) will be selling a vaccine, too.
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The high effectiveness of the authorized Covid vaccines has vaulted the stocks of specialists BioNTech and Moderna this year, carrying them up a respective 300% and 240% to date. Expectations for emergency-use authorization have lifted Novavax stock 60% year to date. For the drug giants Pfizer, J&J, and AstraZeneca, the vaccines are important but not exclusive sources of revenue. Pfizer stock is up in line with the 17% gain of the
this year, with the other two up somewhat less.
For calendar year 2021, Pfizer projects $33.6 billion in sales of the Covid vaccine it developed with BioNTech, with the latter firm getting half the gross profit. Analysts canvassed by Sentieo.com project nearly $19 billion in 2021 revenue for Moderna and $15 billion for BioNTech.
Wall Street has generally figured that Covid vaccine revenues will start tapering off next year, but those forecasts didn’t factor in the Delta and other variants. This week, the medical news site Stat reported that the U.S. Food and Drug Administration is summoning all hands on deck to finish reviews to convert the emergency authorizations of vaccines like Pfizer’s into full approvals by September. That would give state and local governments stronger legal footing to start mandating vaccination for citizens, and not just their employees. More initial doses might get sold.
Evidence of the waning of immunity from initial Covid vaccination is building a case for booster shots. That will bring repeat customers to the companies. Pfizer and BioNTech published a not-yet-peer reviewed study this past week that showed immunity from infection of their highly effective vaccine begins declining at a 6% monthly rate, beginning a few months after vaccination. After six months, efficacy slipped from 96% to 84%–although the vaccinated remained almost completely protected against severe symptoms. In its Wednesday conference call, Pfizer said it hoped to apply for booster-shot authorization in August.
Adjust your vaccine sales models accordingly.
Write to Bill Alpert at [email protected]