Booster jabs are easy money for Pfizer and Moderna

Pfizer

13/08/2021 16:02

(The author is a Reuters Breakingviews columnist.  The opinions
expressed are his own.)
    By Robert Cyran
    NEW YORK, Aug 13 (Reuters Breakingviews) - Moderna  MRNA.O 
and Pfizer  PFE.N  just found an additional pot of gold. The
U.S. Food and Drug Administration on Thursday authorized a third
dose of their coronavirus vaccines for immunocompromised people.
That’s about 3% of Americans, but broader use is probably coming
soon. Both companies will benefit, but Moderna’s roughly $160
billion market capitalization depends on it more.
    The science behind additional shots is somewhat murky as
immunity isn’t an on-off switch. Vaccines lower the risk of
infection, transmission and serious illness. The side effects
from Pfizer and Moderna’s jabs appear to be minimal. As efficacy
tends to wane over time – though how much isn't yet clear for
Covid-19 immunizations – there's a case for an extra shot for
the most vulnerable, even if, as is the case for now, it's not
yet tailored to new virus variants.
    If the goal is to end the pandemic, though, booster shots
aren’t the best use of vaccines. Pfizer cited a study that
showed the efficacy of two doses of its vaccine declined over
time to 84% from 96%. A few percentage points are nice, but the
gains from giving jabs to the unvaccinated are far greater,
which is why the World Health Organization has asked governments
to hold off on boosters until more people receive initial doses.
Yet for political reasons, governments in rich countries
probably will encourage boosters anyway.
    Pfizer and Moderna together expect roughly $50 billion of
vaccine sales this year. Assume generously that half of the
people who receive two doses this year get an additional shot
next year. If the price is the same, that’s roughly an extra 25%
of this year's revenue, or $12.5 billion, to split between them.
    Pfizer's $264 billion market value accounts for a lot more
than just its vaccines. Though it has big plans, Moderna remains
largely focused on Covid jabs for now. It’s valued at about 7
times estimated revenue over the next 12 months, according to
data from Refinitiv. That’s almost twice the multiple accorded
to Pfizer and other peers. Even on that generous valuation
metric, Moderna's worth depends on finding over $20 billion of
sales annually. Moderna has created its own luck so far, but it
will need to sell more than just coronavirus boosters to keep
levitating.
    Follow @rob_cyran https://twitter.com/rob_cyran on Twitter
         
    CONTEXT NEWS 
    - The U.S. Food and Drug Administration on Aug. 12
authorized booster shots of existing Covid-19 vaccines made by
Pfizer and Moderna for patients with compromised immune systems.
The FDA amended the emergency use authorizations for the
vaccines to allow third doses for “solid organ transplant
recipients or those who are diagnosed with conditions that are
considered to have an equivalent level of immunocompromise.”
    - Rochelle Walensky, director of the Centers for Disease
Control and Prevention, has said this group represents less than
3% of American adults.
    - Other countries are studying or have authorized booster
shots more widely. On Aug. 12, an advisory panel to Israel’s
government recommended the country lower the age at which
Israelis would be eligible to receive a booster shot to 50. In
July, Israel began giving booster shots to people over 60.
    - The World Health Organization has asked governments to
hold off on booster shots until more people worldwide receive
their initial doses. 

    <^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
U.S. FDA authorizes COVID-19 vaccine boosters for the
immunocompromised      urn:newsml:reuters.com:*:nL4N2PK0UY
FDA release    https://www.fda.gov/news-events/press-announcements/coronavirus-covid-19-update-fda-authorizes-additional-vaccine-dose-certain-immunocompromised
FOCUS-Pfizer, Moderna seen reaping billions from COVID-19
vaccine booster market       urn:newsml:reuters.com:*:nL1N2PK0LZ
    ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>
 (Editing by Richard Beales and Marjorie Backman)
 ((For previous columns by the author, Reuters customers can
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