Frankfurt The three leading manufacturers of Covid vaccines are also heading for sales in the tens of billions this year. Pfizer/Biontech and Moderna already have delivery orders totaling around $50 billion for 2022 on their books.
Regardless, there is growing uncertainty about how much potential the Covid vaccine business will offer in the longer term. The rapid spread of the omicron variant and rather disappointing analyzes of the effect of additional vaccinations are increasingly causing skepticism.
The current booster vaccinations and the omicron wave, which is associated with rather mild courses, are expected to ensure sufficient immunization of the population and thus drastically reduce the demand for vaccines in the years to come.
Such assessments have recently had a noticeable impact on the stock market valuations of the leading vaccine companies. Biontech and Moderna have now lost around two thirds of their market value compared to their highs, Novavax even almost three quarters.
Several experts, including the head of the EMA department for biological health threats and vaccination strategies, Marco Cavaleri, have recently been rather critical of the idea of quickly administering further booster vaccinations.
The virology professor Ulrike Protzer from the Technical University of Munich and the Berlin immunologist and vaccine researcher Erik Sander warned against the idea of understanding an omicron infection as a substitute for a third vaccination. However, they were also reluctant to give an additional fourth vaccination. “Now this is not something to recommend to the general public. I think three shots give you super protection,” Sanders said.
Fourth vaccination?
A few days ago, the first analyzes from Israel came to the conclusion that a fourth vaccination increased the antibody level again somewhat. But ultimately it is probably not enough to completely ward off omicron infections.
The forecasts of market observers are now more cautious than they were a few months ago. The British analysis company Airfinity, for example, reduced its sales forecast for the five western manufacturers with approved Covid vaccines by around a quarter compared to the previous very high estimates to a total of a good 80 billion dollars.
That would still be an enormous sales volume compared to the size of the vaccine market in the pre-coronavirus era and would represent growth of more than 30 percent compared to 2021. Airfinity had previously expected the vaccine companies, above all Biontech/Pfizer and Moderna, to increase sales by more than 70 percent in 2022.
The British company justifies the correction, among other things, with the fact that the mild course of diseases in the Omicron variant will ultimately lead to a lower order volume in the industrialized countries than previously expected. In addition, the prices in the contracts with low-income countries are reduced.
The previous forecasts of the companies themselves and also the estimates of the bank analysts are much more cautious. Pfizer recently published a guidance of 31 billion dollars in sales for 2022 for the Covid vaccine developed with Biontech Comirnaty, compared to 36 billion euros in the past year. Biontech named a range of 13 to 17 billion euros. That could also amount to a decline of more than 10 percent from the 2021 announced sales of 16 to 17 billion euros.
The Biontech turnover results mainly from deliveries to Pfizer and from profit shares from the partnership. Moderna is forecasting $18.5 billion in revenue so far in 2022, up five percent from last year.
Further talks with governments
However, the statements by the companies and the analysts’ estimates are essentially only based on the supply contracts that have already been firmly agreed. Potential further contract conclusions are not or only to a small extent taken into account.
Both Pfizer boss Albert Bourla and Moderna boss Stephane Bancel recently referred to numerous other talks with governments. If a special vaccine variant adapted to Omicron becomes necessary, additional demand is also expected, explained Bourla recently at the JP Morgan health conference.
Even without new vaccine variants and additional booster vaccinations, the global vaccine requirement is still huge for the time being. To date, around eleven billion cans have been produced worldwide and 9.8 billion cans shipped, of which a good six billion cans are from Western manufacturers. In principle, 11 to 12 billion more doses would be required to immunize the entire world population with three vaccinations.
The circle of vaccine providers will expand in the current year after the US company Novavax has now received approvals from the EU Commission and the WHO. In addition, the pharmaceutical group Sanofi and the biotech company Valneva, which is also based in France, could also enter the market if their studies and approval procedures go well.
On the other hand, the Chinese suppliers Sinovac and Sinopharma are unlikely to play any role internationally given the weak effectiveness of their vaccines. Unlike western manufacturers, they have been unable to sign any new contracts outside of China since September. In turn, Pfizer/Biontech and Moderna are likely to benefit most from this.
According to experts, the two mRNA vaccine providers also have the greatest leeway in production so far, while the newcomer Novavax is likely to have trouble meeting its delivery commitments of two billion doses for the time being.
Four billion vaccine doses
Pfizer and Biontech have announced a capacity of around four billion doses for 2022. They could theoretically still roughly double their deliveries compared to the previously firmly contracted quantities. That in turn would result in sales of more than $60 billion in the current year. Moderna is targeting production of two to three billion cans, which would equate to sales well in excess of $40 billion if sold at full capacity. The average sales prices for both providers have recently trended upwards.
Meanwhile, the forecasts for vaccine requirements beyond 2022 are even more uncertain than the estimates for 2022. According to Bloomberg, the range of analyst estimates for Moderna’s sales in 2023 is between $5.4 billion and $20 billion.
The volume of the future Covid vaccine market will essentially depend on the frequency with which additional vaccinations are recommended and for which group of people. If, for example, it comes down to annual booster vaccinations, Bloomberg analyst Sam Fazeli estimates that wealthy industrialized countries will need 300 million to a billion doses of vaccines annually, depending on whether boosters are only for older people aged 60 and over or recommended for all adults. With an assumed price of 30 dollars per dose, this results in a market volume of still respectable nine to 30 billion dollars.
The companies are also demonstrating confidence that this is a long-term business. Pfizer, for example, recently pointed out that orders with a volume of more than 500 million doses have already been agreed for 2023. That alone should guarantee the US group and its German partner Biontech sales of more than eight billion dollars.
And looking beyond that, Pfizer CEO Albert Bourla is extremely confident. Ultimately, the most likely expectation is that governments would recommend annual vaccinations for relatively large sections of the population. “Comirnaty therefore offers the potential for Pfizer to become a long-term sustainable business, whether in a pandemic or in an endemic environment.”
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