Modern (NASDAQ: MRNA) and Pfizer (NYSE: PFE) made history when they brought their developmental coronavirus vaccines to the market in less than a year. So far, however, Moderna has been the only one to benefit from the stock price perspective. The company’s stock has soared more than 600% this year. Pfizer’s shares have changed little.
Why such a difference? Investors knew that a possible vaccine would be the first product marketed by Moderna and, therefore, its source of revenue from the product. On the other hand, Pfizer’s future did not depend on the vaccine program. This is because the large pharmaceutical company generates revenue from a wide range of products.
Now we have entered a new phase. Moderna and Pfizer launched their vaccines this month with emergency clearances. Let’s take a look at which company can win when it comes to revenue – and sharing performance.
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UK, US and European permits
Pfizer and partner BioNTech obtained authorization in the United Kingdom, then in the USA and, more recently, in the European Union. The pharmaceutical company has orders for at least 550 million doses from several countries and regions, including the USA, the European Union, the United Kingdom and others. The figure does not include Canada, which ordered doses, but did not announce how many.
Pfizer did not disclose how much it is charging, but we can use the price the US paid as a guide. This represents $ 1.95 billion for 100 million doses, or $ 19.50 per dose. For the doses ordered so far, this amounts to more than $ 10 billion. Pfizer is also expected to share some of its earnings with BioNTech.
Let’s take a look at Moderna. The US Food and Drug Administration (FDA) granted the emergency use authorization for the Modern vaccine last week. Biotechnology has secured orders for more than 470 million doses from the United States, the European Union, Canada, Switzerland and other countries. Like my Pfizer count, this does not include countries that have not announced the quantities ordered. In that case, that means Singapore and Qatar.
We will use the price the US paid again to give us an approximate revenue estimate, and that is $ 1.5 billion for $ 100 million doses – or $ 15 a dose. That means more than $ 7 billion in revenue from the doses ordered so far. One point to remember is that Moderna has been pricing smaller orders, from $ 32 to $ 37 a dose, so this can bring in even higher revenues.
There are a few other points to consider. First, it is clear that companies will not generate these revenue levels overnight. Moderna plans to provide 125 million doses in the first quarter. Therefore, in the short term, revenue may be just under $ 2 billion.
Pfizer said it could supply up to 50 million doses this year and 1.3 billion doses by the end of next year. Therefore, it can generate about US $ 975 million by the end of this year.
Blockbuster levels
Still, both Moderna and Pfizer are expected to quickly reach the $ 1 billion success level in sales of their coronavirus vaccines. And that is significant.
From the point of view of revenue, without considering other factors, companies can be at the same level. But a logistical factor is also part of the picture. I’m referring to transportation and storage. In this area, Moderna gains more points.
Moderna’s vaccine can be transported and stored at normal refrigerator temperatures. It can still be left at room temperature for up to 12 hours. Pfizer requires ultra-low temperatures, so countries and healthcare systems that want to supply the Pfizer vaccine should invest in special freezers.
Freezer costs range from $ 5,000 to $ 15,000. This considerably increases the overall vaccination budget. And Stat News reports that Pfizer’s minimum order requirement is higher than that of Moderna – 975 doses versus 100 doses. Temperature and minimum order factors are likely to make it difficult – or impossible – for many small healthcare facilities to consider the Pfizer vaccine.
What does this mean for companies and their investors?
In the first few weeks of the vaccine launch, the world needs all the vaccines it can get. As you can see from the figures above, the two companies do not have the production capacity to immediately fulfill all orders. Even though the Pfizer vaccine poses logistical challenges, countries and healthcare environments will do their best to adjust.
But once initial orders are met and both companies reach full production, Moderna will likely emerge as a leader. Transport and storage requirements mean that the Pfizer vaccine will cost countries much more than just the price of doses. Governments will take this into account when deciding to place their next orders.
As for the stock price, Moderna also has a lot to gain. Investors will closely monitor the revenue from this first and only product in the coming quarters. If it meets or exceeds expectations, the actions of this biotechnology company may be on the way to another year of victories.