Why AstraZeneca may dominate the coronavirus vaccine market

All eyes are on the leaders of the coronavirus vaccine race in recent weeks. Until there, Modern (NASDAQ: ARNM), Pfizer (NYSE: PFE), and AstraZeneca (NASDAQ: AZN) reported efficacy data from Phase 3 trials. The United States Food and Drug Administration (FDA) will use this information, along with the safety results, to determine which players will receive authorization for use of emergency (EUA).

Although all three companies reported positive results, AstraZeneca’s performance was below that of its two rivals. Pfizer and Moderna reported an efficiency of 95% and an efficiency of 94.5%, respectively. One dosing regimen in the AstraZeneca trial produced 90% efficacy – but the average of its two tested dosing regimens only showed 70% efficacy. However, this large pharmaceutical player can still take the largest share of the market. “How is it possible? you might ask. Well, there are a few things that can move AstraZeneca forward.

During the pandemic, AstraZeneca promised to sell its coronavirus vaccine for no profit. At the price negotiated with the US government, AstraZeneca is offering the potential vaccine at $ 4 per dose. (This compares to $ 15 for Moderna and about $ 20 for Pfizer, if we use the numbers from their agreements with the United States)

Non-profit engagement

According to announced vaccine supply agreements, AstraZeneca is outperforming its rivals. It is likely that the company’s nonprofit commitment worked in its favor, as countries and organizations considered various vaccine manufacturers. AstraZeneca was the first company to sign a supply agreement with the European Commission. It was in August. AstraZeneca will deliver 400 million doses to the region at no profit. The European Commission signed supply agreements with Pfizer and Moderna this month after months of negotiations. The terms of these agreements have not been published.

Of course, some governments may eventually turn to the product with the best efficacy. And at this point, AstraZeneca may lose some customers. But it’s clear that affordability may be the top priority for others. Some of AstraZeneca’s first agreements were for initiatives aimed at broad access to vaccines. For example, through a licensing agreement with the Serum Institute of India, AstraZeneca will deliver one billion doses of vaccine to low- and middle-income countries. AstraZeneca will also provide 400 million doses to the European Alliance for Inclusive Vaccines.

AstraZeneca did not talk about the profit it would make after the pandemic. But if the price remains lower than or equal to that of its competitors and customers are satisfied with the results, the company can maintain its status as the first supplier.

Three billion doses

The capacity should also help AstraZeneca. The company is preparing to deliver three billion doses on a rolling basis next year. Moderna’s capacity is between 500 million and one billion doses next year. Pfizer aims to produce 1.3 billion doses during this time. The closest to AstraZeneca in terms of capacity is Novavax (NASDAQ: NVAX). The biotech, which plans to release phase 3 data in the first quarter, is preparing to make two billion doses by mid-2021.

Considering the global need for a vaccine, there is room for all of these vaccine manufacturers. But if AstraZeneca’s rivals don’t increase production capacity, AstraZeneca is poised to be the biggest supplier – for that reason alone.

The temperature of your refrigerator

Finally, the nature of AstraZeneca’s vaccine candidate also offers it an advantage. The experimental vaccine can be transported and stored at standard temperature in your refrigerator for about six months. This facilitates administration in various health facilities without investment in additional supplies. Candidates from Moderna and Novavax also offer this advantage. But Pfizer’s experimental vaccine requires extremely low storage temperatures. This means that many healthcare establishments have to invest in special freezers – or forgo the Pfizer option.

All of this means that AstraZeneca – despite its efficacy reading – is likely to dominate the coronavirus vaccine market. If the vaccine candidate is cleared or approved by the FDA, AstraZeneca says it is preparing submissions “immediately” to regulatory agencies around the world that offer emergency clearance.

AstraZeneca is a strong pharmaceutical company to add to your portfolio. But I don’t expect leadership in coronavirus vaccines to deliver revenue (remember the nonprofit commitment) anytime soon. Possible news from the EUA could offer a boost to stocks. But like other major drugstores, AstraZeneca’s shares are less responsive to news about coronavirus vaccines than those of clinical-stage biotechnology companies. Why? Biotechnology will depend on sales of coronavirus vaccines for their income; the big pharmaceutical companies won’t.

The growth of AstraZeneca’s stock will occur over time, driven by the company’s entire portfolio of marketed products.