Pfizer hikes Covid-19 vaccine price by 27% What this means for the stock.
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Pfizer said it signed a deal to supply vaccines to the US in the fall, but Moderna has not yet announced a sale.
Jacob King – WPA Pool / Getty Images
Pfizer
As the US has raised the price of its Covid-19 vaccine, investors may be underestimating the durability of its Covid-19 vaccine revenue.
Wednesday night,
Pfizer
(ticker: PFE) and its partner
BioEntech
(BNTX) said it has signed a $3.2 billion contract with the US government for 105 million doses of its Covid-19 vaccine, to be distributed later this summer and in the fourth quarter of the year.
The price of $30.48 per dose represents a 27% increase over the $24 paid by the US and Pfizer.
BioEntech
200 million per dose in July 2021. This is 56.3% higher than the $19.50 per dose the US paid in July 2020 for an initial order of 100 million shots.
The news comes a day after advisers to the Food and Drug Administration voted in favor of renewing Covid-19 boosters for the fall to specifically protect against the omicron mutation. That vote, as it were Baron’s Argued at the time, Pfizer and messenger represented significant confidence by public-health officials in RNA-based vaccines.
Moderna
(mRNA), and the central hope is that they can be quickly adapted to combat the rapidly changing virus.
May have a leg up on Pfizer
Moderna
In the autumn booster market. Moderna has not yet announced a deal to supply the US for the fall.
At Tuesday’s meeting, FDA’s advisers expressed a strong preference for a fall booster targeting the original Wuhan strain of the virus and the newly emerging BA.4/BA.5 Omicron subvariants. If Pfizer presents data on the BA.4/BA.5 vaccine in mice and says it could be ready for release in early October under certain conditions, Moderna said the BA.4/BA.5 vaccine could take until early November.
Moreover, before the meeting, Moderna’s CEO had argued Baron’s The company can only manufacture the BA.1-specific bivalent vaccine for fall. It targets the original Wuhan virus and an early strain of Omicron.
Shares of Pfizer were down 0.8% in premarket trading Thursday
BioEntech
of
American depository receipts rose 1.2%. Shares of Moderna fell 1.1%.
According to FactSet, analysts currently expect a sharp decline in Covid-19 vaccine revenue for Pfizer, from $33.9 billion this year to $16.3 billion in 2023 and $7.5 billion in 2024. This agreement helps build an argument against drop-off. In addition to the 105 million doses contracted for delivery this year, the deal includes an option for an additional 195 million doses, which will meet US demand for next year.
In a note early Thursday, SVB Securities analyst David Reisinger wrote that the deal is likely to boost Pfizer’s 2022 sales guidance by $3 billion, and that it has a “positive reading” for “comirnati tail revenue.”
One worry for Pfizer investors is that the US could shift to a commercial market for Covid-19 vaccines this year or next, leading to a drop in uptake. But Reisinger says the deal removes that risk, adding that the U.S. is buying large quantities. The price increases show that Pfizer retains significant market power, he says.
“The consistent price increase with each contract suggests that PFE/BNTX has some pricing power for Cominrati even in a pandemic scenario, and suggests that future commercial prices may rise meaningfully,” Reisinger writes.
White House officials have warned that the lack of congressional action has weakened the government’s ability to purchase vaccine doses for the fall. In a statement Wednesday, the Department of Health and Human Services reallocated $10 billion in existing funds to pay for vaccines and treatments, and said $3.2 billion was coming out of that pot to Pfizer.
As part of the agreement, Pfizer said it will supply doses at all authorized and approved dose levels, including for young children and adults. If authorized by the FDA, the deal could also include Omicron-specific vaccines, it said.
On Thursday, Pfizer said it has submitted an application to the FDA for approval of its Covid-19 antiviral Paxlovid. Paxlovid received emergency use authorization from the FDA in December. The company said it had shipped 12 million paxlovid treatment courses worldwide by the end of May.
Write to Josh Nathan-Kazis at [email protected]
