According to a Bloomberg report, Pfizer Inc. projected about $15 billion in revenue this year from the Covid-19 vaccine it developed with BioNTech SE, but the shares fell amid questions about the durability of the market for the shot.
Vaccine Can Tackle New Variants
Company officials led by Chief Executive Albert Bourla said on a conference call that the vaccine looks capable of taking on new variants, its price may increase and new products using its messenger RNA technology are on the way. Still, the shares fell as much as 4.3% and were down 2.2% at 2:10 p.m Tuesday in New York.
The first of the Western coronavirus shots cleared for use, the Pfizer-BioNTech vaccine will soon face competition from more entrants, including from Johnson & Johnson and Novavax Inc. that are poised for authorization. New virus variants may also require additional vaccines or reformulated booster shots for protection.
Position Difficult To Sustain
Pfizer’s position in the Covid-19 vaccine market may be difficult to sustain over time, said JPMorgan analyst Christopher Schott. Investors need to see further de-risking of Pfizer’s pipeline to support growth, he said in a note to investors.
“We believe the view on operating margin is unnerving. Sales expectations of $59.4-$61.4 billion are $4 billion higher than consensus at the midpoint, with Covid-19 vaccine sales expected at $15 billion vs. consensus for $11 billion. The midpoint EPS goal of $3.15 is slightly below views, due to much lower gross margin and higher R&D costs.”
— Pharma analysts Michael Shah and Sam Fazeli
Higher Price Of Vaccine
Pfizer commands a higher price for its Covid-19 vaccine than some rivals. Under the terms of its supply deal with the U.S., it is charging $19.50 for each shot of the two-dose regimen. Meanwhile AstraZeneca Plc, which hasn’t yet gained U.S. authorization for its two-dose vaccine, has said it plans to charge less than $4 per shot, and J&J is aiming to price its single-shot vaccine at less than $10.
Sales Projection
Pfizer’s vaccine sales projection primarily includes doses that are expected to be delivered this year under existing contracts, the company said as it reported fourth-quarter earnings.
Excluding those sales, Pfizer expects 2021 full-year revenue of $44.4 billion to $46.4 billion. Annual earnings per share will be $3.10 to $3.20. Bourla had said earlier this month that earnings would top out at $3.10 a share. The guidance was raised primarily because of the shifting vaccine outlook, according to the company.
Vaccine Sales
Based on mRNA technology that makes human cells into vaccine factories, the Pfizer-BioNTech shot was more than 90% effective in preventing Covid-19 symptoms in a late-stage clinical trial. It brought in $154 million in sales in the fourth quarter.
Pfizer and Germany’s BioNTech initially expected to produce 1.3 billion doses of the vaccine, known BNT162b2, this year. They later boosted their output goal to 2 billion doses after a label change allowed doctors to extract six doses instead of five from each vial, and they secured additional manufacturing capacity. The boon to supply will likely add to the companies’ sales.
To date, Pfizer and BioNTech have reached agreements totaling 836 million doses, according to Bloomberg’s Vaccine Tracker, including 300 million for the EU and 200 million for the U.S. Though executives declined to comment on the underlying number of doses accounted for in the 2021 forecast, they suggested more agreements with governments could still come, likely leading to an even larger sales figure.
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Source: BloombergQuint
