What’s New With Pfizer’s Covid-19 Vaccine?

Pfizer (NYSE: PFE) has indicated that a third dose of its vaccine may be needed within six to 12 months after full vaccination, as initial immunity wanes and as new and more aggressive variants of the Coronavirus continue to spread. The company says that it has preliminary data to prove that an additional dose of its original mRNA vaccine BNT162b2 would “preserve the highest levels of protective efficacy.” Although the final call on a third dose will be taken by the U.S. FDA, which is waiting for more data, there appears to be a case for higher dosing. Israel, for instance, has noted that the efficacy of the original Pfizer shot at preventing Covid-19 infections dropped sharply to 64% from 94% as the Delta variant of the virus, first identified in India, spreads in the country. Israel has already started administering booster doses of the original Pfizer shot to fully-vaccinated adults who are at high risk, including the elderly and immuno-compromised. Pfizer is also working on an updated shot designed to take on the Delta variant of the infection, noting that clinical studies could begin as early as August, subject to regulatory approvals.

Overall, booster doses should translate into considerable revenues for vaccine makers. While Pfizer has estimated vaccine revenue at over $26 billion in 2021, we think that number is very conservative and project that sales could actually stand at close to $35 billion this year. With booster doses looking highly likely, we think it’s fair to assume that Covid vaccines will bolster Pfizer’s top-line over the foreseeable future. We value Pfizer stock at $50 per share, ahead of the current market price of about $40, considering the big upside to vaccine sales and growth of the company’s other offerings including its cancer drug Ibrance, biosimilars for some of the top-selling cancer drugs, Xeljanz, and anticoagulant, Eliquis.

See our indicative theme on Covid-19 Vaccine stocks for more details on the performance of key U.S.-based companies working on Covid-19 vaccines.

[4/22/2021] What’s Happening With Pfizer’s Covid-19 Vaccine?

Pfizer (NYSE: PFE) and its German partner BioNTech currently produce one of the most sought-after Covid-19 vaccines. Below are some of the recent updates relating to the shot.

Firstly, Pfizer CEO Albert Bourla has said that people who receive Covid-19 vaccines will likely require booster shots within a year and potentially require an annual shot thereafter, much like seasonal flu shots, to protect against the virus as it evolves. Pfizer’s rival Moderna, too, is working on booster shots. This should be positive for Covid vaccine makers as they could likely see some level of recurring revenues from what initially appeared like a one-off vaccine product. Pfizer is also looking to expand its vaccine business following the pandemic, extending its use of the gene-based mRNA technology which has proved highly effective in the Covid-19 vaccines.

The European Union will not exercise its option to purchase up to 300 million additional doses of Covid-19 vaccines from AstraZeneca and Johnson & Johnson (NYSE:JNJ), per a report from Reuters, while looking to secure more doses from Pfizer/BioNTech. The AstraZeneca and J&J vaccines are being investigated for extremely rare, but potentially deadly side effects of blood clots. The E.U. has orders for 600 million doses from Pfizer/BioNTech for this year and the European Commission is in talks to buy up to 1.8 billion vaccine doses from the companies in the coming years. The bloc is significantly behind its vaccination targets, with just 7% of its population fully vaccinated, compared to about 26% for the U.S. ^[1]

While Pfizer projected that 2021 sales for the Covid-19 vaccine would be around $15 billion during its Q4 2020 earnings update back in February, it’s quite likely that sales will exceed this forecast, considering the new orders, potential booster doses, and recent setbacks for key competitors.

See our indicative theme on Covid-19 Vaccine stocks for more details on the performance of key U.S.-based companies working on Covid-19 vaccines.

[4/5/2021]

Pfizer (NYSE: PFE) and its German partner BioNTech’s Covid-19 shot has emerged as one of the most sought-after vaccines. Below are some of the recent updates relating to the shot.

Pfizer recently indicated that its vaccine was over 91% effective at preventing Covid-19 six months after taking the second dose. While this number is below the 95% efficacy rate that was reported for the vaccine based on shorter-term studies, it still makes for a highly effective vaccine. The shot also proved 100% effective at preventing Covid in a trial of 800 participants in South Africa, where a new strain of the virus is dominant. Although the sample size is small, the data is significant as there have been concerns about the efficacy of vaccines in general against this particular strain.

Pfizer has also said that its shot was 100% effective in preventing Covid-19 in children ages 12 to 15. The company plans to submit this data to the U.S. FDA, hoping that vaccinations for this age group could begin before the start of the next school year. This could significantly increase the addressable market for Pfizer’s shot. Vaccinating children is crucial to ending the current pandemic, as experts indicate that it could be difficult for a country to reach herd immunity until children are protected.

Overall, the recent developments bode well for the sales of the Pfizer/BioNTech shot. The two companies have plans to scale up supply nicely, intending to produce about two billion doses of their vaccine this year, while noting that they should have the capacity to produce as many as three billion doses in 2022. Moreover, unlike rivals such as AstraZeneca and Johnson & Johnson who have pledged to not profit from their vaccines through the current pandemic, Pfizer’s shot is expected to have a positive EPS impact. This could help Pfizer stock if sales ramp up further.

See our indicative theme on Covid-19 Vaccine stocks for more details on the performance of key U.S.-based companies working on Covid-19 vaccines.

[3/17/2021]

AstraZeneca’s (LON: AZN) Covid-19 vaccine was seen as key to fighting the pandemic globally, given its low cost and easy distribution, but its roll-out and uptake haven’t exactly been smooth. The shot was recently suspended from use in multiple countries including Germany, Denmark, Norway, and France due to cases of severe blood clotting following vaccinations. Separately, the shot’s lower reported efficacy figures, limited efficacy against some newer strains, and the company’s missteps during phase 3 trials have also hurt perception surrounding the vaccine. Although the AstraZeneca vaccine is likely to continue to play a role in vaccinating populations globally, the recent problems will give rival vaccines an edge. We think Pfizer (NYSE: PFE) and German partner BioNTech’s vaccine could be a key beneficiary of AstraZeneca’s current setbacks for a couple of reasons. Firstly, the Pfizer shot is among the most effective Covid-19 vaccines (roughly 95% effective against original strain) Secondly, supply is scaling up nicely. The two companies intend to produce about two billion doses of their vaccine this year and have noted that they should have the capacity to produce as many as three billion doses in 2022, subject to demand. Moreover, Pfizer’s shot now appears to be a bit easier to store and distribute than before, with the FDA allowing it to be stored at more standard freezing temperatures, unlike the ultra-cold temperatures that were required at the time of U.S. approval. Now, unlike AstraZeneca and Johnson & Johnson who have pledged to not profit from their vaccines through the current pandemic, Pfizer’s shot is expected to have a positive EPS impact and this could help Pfizer stock if sales ramp-up further.

[Updated 2/22/2021] Pfizer Vaccine Updates

Pfizer (NYSE: PFE) and its German partner BioNTech have indicated that they should have the capacity to produce as many as three billion doses of their Covid-19 vaccine in 2022, subject to demand. For perspective, Pfizer intends to produce about 2 billion doses of its shot this year and is projecting about $15 billion in Covid-19 vaccine revenues. That said, we don’t think there will be sufficient uptake for the additional capacity next year for a couple of reasons.

Firstly, the market for Covid-19 shots is becoming much more crowded. Besides Moderna and AstraZeneca who have been ramping up production of their shots, Johnson & Johnson recently received FDA clearance for its single-dose Covid-19 shot and the company is looking to produce as many as one billion doses this year. Vaccine specialist Novavax also appears to have a highly effective shot based on U.K. trials and is looking to produce about two billion doses annually. Even China’s Sinovac Biotech is looking to reach an annual capacity of 2 billion doses by June. Considering the strong planned supply of shots, there’s a good chance that a meaningful percentage of the global population will be inoculated against Covid-19 by the end of this year. In the U.S. for example, at the current rate that vaccines are being administered (2.15 million doses per day over the last week, per the Bloomberg Vaccine Tracker), all adults who want a vaccine are likely to get one by the summer. Demand over 2022 could come from emerging markets, where pricing could be lower. Moreover, Pfizer’s vaccine, which needs to be stored at colder temperatures compared to rivals, could be less suitable for these markets. The Pfizer shot needs to be stored at freezing temperatures of -25 to -15 degrees Celsius, compared to the J&J shot which can be stored at a refrigerated temperature of 2 to 8 degrees Celsius.

See our indicative theme on Covid-19 Vaccine stocks for more details on the performance of key U.S.-based companies working on Covid-19 vaccines.

[Updated 2/22/2021] Pfizer Vaccine Updates

Last week, there were two positive developments relating to Pfizer (NYSE: PFE) and its German partner BioNTech’s Covid-19 vaccine, and one possible negative development. Firstly, Pfizer says based on internal testing that its vaccine can tolerate warmer temperatures than initially specified, possibly making it easier to handle and distribute. Under current protocol, the vaccine is being stored and transported at ultra-cold temperatures of -80 to -60 degrees Celsius until five days before use, calling for specialized equipment and a longer thawing period. However, the company is now asking the FDA to allow the shot to be stored for up to two weeks at -25 to -15 degrees Celsius, enabling the use of more standard freezers. This could make the shot more accessible in rural areas and emerging markets that don’t have special freezers. That said, rival Moderna’s shot is still easier to handle, as it can be stored at standard freezer temperatures for as long as six months and remain refrigerated for up to 30 days.

Secondly, per a study conducted on 9,000 medical staff in Israel, a single dose of the Pfizer shot alone was about 85% effective in preventing Covid-19 infection between two and four weeks after inoculation. This is not far off from the roughly 95% efficacy showed under the two-dose regimen. This could effectively help to vaccinate more people quickly if the second dose of the shot can potentially be delayed or perhaps even avoided altogether. For perspective, Pfizer is looking to produce as many as 2 billion doses of the shot this year.

Separately, based on a lab study, Pfizer says that the South African strain of the novel coronavirus could cut the protective antibodies produced by its vaccine by two-thirds. Although this doesn’t necessarily mean that the shot will not be effective against the new strain, it is concerning. Considering this, the company is exploring developing an updated version of its shot or a booster shot.

See our indicative theme on Covid-19 Vaccine stocks for more details on the performance of key U.S.-based companies working on Covid-19 vaccines.

[Updated 12/3/2020] Emergency Use in the United Kingdom

Pfizer‘s (NYSE: PFE) Covid-19 vaccine has been approved for emergency use in the United Kingdom, with initial shots likely to be given as soon as next week. The U.K is the first western country to ratify the shot and the country is expected to be allotted between four million to five million doses of the vaccine this year. For a perspective, Pfizer and its German partner BioNTech intend to manufacture up to 50 million doses this year. The U.K. rollout will be a crucial test of the logistics and distribution of the vaccine – which needs to be stored at ultra-cold temperatures using custom-made vaccine freezer boxes – and should give a sense of how effectively the company can scale up deployment globally. Pfizer has applied for emergency use authorization with the U.S FDA, which is likely to conduct its review on December 10th, with the vaccine likely to be available in limited quantities post that.

See our indicative theme on Covid-19 Vaccine stocks for more details on the performance of key U.S.-based companies working on Covid-19 vaccines.

As we’ve noted previously, the Covid vaccine is unlikely to meaningfully move the needle for Pfizer stock (see our update below). However, Pfizer stock still looks attractive at current levels. The availability of Pfizer & other Covid vaccines could mark the beginning of the end of the Covid-19 pandemic, which has reduced doctors’ visits for other ailments and delayed patients from seeking care. As vaccines are deployed and the recovery gathers pace, it should help Pfizer’s Biopharma segment, which includes oncology drugs, such as Ibrance, vaccines, such as Prevnar, and Pfizer’s newly approved biosimilars for some of the blockbuster drugs, including Humira and Avastin, aiding the stock. Our dashboard ‘Buy Or Sell Pfizer Stock’ provides the key numbers behind our thinking. Also, see our analysis Here’s Why Pfizer Stock Looks Inviting At $39 Levels

[Updated 11/10/2020] Why Pfizer’s Vaccine Won’t Move The Needle For The Stock

Pfizer (NYSE: PFE) and its German partner BioNTech indicated that their Coronavirus vaccine, dubbed BNT162b2, was over 90% effective at preventing Covid-19 infections among volunteers, based on early data from phase 3 trials. The results are surprisingly strong, considering that the U.S. FDA had set a baseline efficacy of just 50% for the approval for Covid-19 vaccines. While there is a possibility that the efficacy rate of Pfizer’s vaccine could change as more data comes in, the numbers are no doubt encouraging. The companies are on track to file an emergency use application with the U.S. FDA later this month if pending data indicate that the vaccine is safe. ^[2] The companies intend to manufacture up to 50 million doses this year, and as much as 1.3 billion doses in 2021. Two shots of the vaccine will be required per person.

While Pfizer stock was up by almost 8% following the news, we think it’s unlikely that the vaccine will meaningfully move the needle for the company for multiple reasons. (Related: Are Covid Vaccine Stocks Worth Investing In?) For perspective, Pfizer has agreed to supply the U.S. government with the vaccine at about $19.50 per dose, and it’s possible that average prices could be well below this, considering that pricing might be lower in emerging markets. Also, vaccines traditionally have lower profitability versus prescription drugs. Combined with the large public interest in facilitating vaccine access, these margins may face even more downward pressure. Considering that the vaccine is co-developed with BioNTech, any profits will likely be shared.

Competition is also likely to mount as there are likely to be several more successful vaccine candidates from other companies in the coming quarters. For example, clinical-stage biotech Moderna (NASDAQ: MRNA), which also uses an mRNA-based technology like the Pfizer vaccine, is slated to report efficacy data in the coming weeks. (related: How Will The Covid-19 Vaccine Impact Moderna’s EPS?) Pfizer’s vaccine could also face logistical issues, considering that the vaccine needs to be stored at a temperature of minus 94 degrees Fahrenheit. On the other hand, vaccines being developed by the likes of Oxford- AstraZeneca, Novavax, and others can be held at regular refrigerated temperatures. This could potentially limit the use of Pfizer’s vaccine to clinics and hospitals that have the appropriate storage facilities.

See our indicative theme of  Covid-19 Vaccine stocks – which includes U.S.-listed pharma and biotech companies. The theme is up by about 630% year-to-date versus about 12% for the S&P 500.

[Updated 11/4/2020] Covid-19 Vaccine stocks

Our indicative theme of Covid-19 Vaccine stocks – which includes a diverse set of U.S.-based pharma and biotech companies developing Covid vaccines – is up by about 560% year-to-date, on an equally weighted basis, compared to the S&P 500 which has gained just about 4% over the same period. While most vaccine stocks declined last week, amid a broader sell-off in the markets, they are likely to come back into the spotlight as efficacy data from late-stage trials is expected from frontrunners Pfizer (NYSE: PFE) and Moderna (NASDAQ: MRNA) in the coming weeks. Below is a bit more on the companies in our theme of Coronavirus Vaccine stocks and their relative performance.

Novavax (NVAX), a vaccine development company, began late-stage trials of its Covid vaccine in the U.K in September, and large-scale phase 3 trials are due to begin in the U.S. and Mexico this month. While the company doesn’t have any other products on the market yet, its flu vaccine NanoFlu could be ready for potential FDA approval. The company has received about $1.6 billion in funding from the Federal government. The stock has soared 2,000% year-to-date.

NVAX

Moderna (MRNA) , a clinical-stage biotech company, is carrying out phase 3 trials of its Covid-19 vaccine, completing enrollment of 30,000 participants. The company is likely to have data on whether its vaccine works or not by this month, and has noted that it would seek emergency approval from the FDA if the vaccine is at least 70% effective. The stock is up 253% this year.

Johnson & Johnson (JNJ): Unlike most other vaccine candidates, which are likely to require two shots, J&J is targeting a single-dose vaccine. While the company had to pause trials in mid-October after an illness was reported in a volunteer, the company is now preparing to resume trials. The stock is down by -5.1% this year.

Pfizer (PFE) is working with German partner BioNTech on a Covid-19 vaccine. The company is likely to have efficacy data from late-stage trials available shortly. The company could supply about 40 million doses in the United States in 2020 if the data is positive and regulators approve the vaccine. The stock is down by about -7.6% this year.

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Notes:

1. Bloomberg Vaccine Tracker [↩]
2. Pfizer Press Release, November 9, 2020 [↩]