Why Pfizer and Moderna Won’t Make As Much Money From US Booster Doses As You Might Think

The boosters are coming. For a while, the US Centers for Disease Control & Prevention (CDC) and Food and Drug Administration (FDA) downplayed the need for third COVID-19 booster doses. The two agencies have now changed their tone.

On August 12, the FDA updated the Emergency Use Authorizations (EUA) for COVID-19 vaccines manufactured by Pfizer (NYSE: PFE) with his partner, BioNTech (NASDAQ: BNTX), and Modern (NASDAQ: mRNA) to include a third booster dose for immunocompromised people. A day later, the CDC changed its position to recommend booster doses of the two messenger RNA (mRNA) vaccines for people with moderate to severely immunosuppressed conditions.

With the EUAs in hand for the third booster doses, will major COVID-19 vaccine manufacturers generate significantly more revenue now? Not really. Here’s why Pfizer and Moderna won’t make as much money from the US booster doses as you might think.

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A relatively small market

One of the main reasons Pfizer and Moderna won’t make that much more money is the limited reach of EUA extensions. The FDA said the broader authorizations will allow booster doses for “recipients of solid organ transplants or those diagnosed with conditions considered to have an equivalent level of immunosuppression.”

Acting FDA Commissioner Janet Woodcock said, “After a careful review of the available data, the FDA has determined that this small, vulnerable group may benefit from a third dose of Pfizer-BioNTech or Moderna vaccines. Its wording clearly indicates that the target group for booster doses is not very large.

How big is the opportunity for Pfizer and Moderna? According to the CDC, about 3% of American adults are moderately to severely immunocompromised. This represents around 8 million people.

Using the price of $ 24 per dose for the Pfizer-BioNTech COVID-19 vaccine, this market is in the order of $ 190 million. And it will be shared between Pfizer and Moderna. Pfizer expects its COVID-19 vaccine to generate $ 33.5 billion in sales this year. Moderna projects around $ 20 billion in sales for its vaccine. The US market for booster doses under the current expanded USA accounts for less than 1% of these totals.

The business is done

Even if the potential size of the market were considerably larger, Pfizer and Moderna would likely not increase their revenues much in the near term yet. Why? The US government has already purchased many more doses than it needs to fully immunize all Americans, and it still has plenty of booster doses left.

The United States has entered into supply agreements with Pfizer and Moderna for 500 million doses each. That’s a total of 1 billion doses to vaccinate a country of about 333 million people. Every person in the United States could receive the two standard doses of mRNA vaccines and receive a third reminder.

Of course, COVID-19 vaccines are not yet licensed for everyone in the United States. So far, the FDA has not granted EUAs to children under the age of 12. There are approximately 50 million children in this group.

Also, keep in mind that the US government has supply agreements with other vaccine manufacturers. Johnson & johnson has pledged to deliver 200 million doses of its single injection vaccine. The United States will receive an additional 100 million doses of Novavax, which hopes to file an EUA application in the fourth quarter of this year for its COVID-19 vaccine.

Still great opportunities

None of the mRNA vaccine stocks have increased significantly due to the FDA and CDC announcements last week. However, there are still great opportunities for Pfizer and Moderna, related to boosters.

On the one hand, not all countries have obtained a supply surplus like the United States. If those other countries allow or approve booster doses for large groups (not just immunocompromised individuals), Pfizer and Moderna could experience greater sales growth.

These companies also anticipate the need for regular booster doses for most people at least once a year. Assuming this scenario plays out, Pfizer and Moderna will each generate billions of dollars each year from their COVID-19 vaccines.