Tue. Oct 26th, 2021

Billions more in profits are at stake for some vaccine makers as the U.S. moves toward dispensing Covid-19 booster shots to shore up Americans’ protection against the virus.

(Photo Courtesy: RAND Corporation)

U.S. health officials late on Thursday endorsed booster shots of the Pfizer vaccine for all Americans 65 and older — along with tens of millions of younger people who are at a higher risk from the coronavirus because of health conditions or their jobs.

Officials described the move as a first step. Boosters will likely be offered even more broadly in the coming weeks or months, including boosters of vaccines made by Moderna and Johnson & Johnson. That, plus continued growth in initial vaccinations, could mean a huge gain in sales and profits for Pfizer and Moderna in particular.

“The opportunity quite frankly is reflective of the billions of people around the world who would need a vaccination and a boost,” Jefferies analyst Michael Yee said.

Wall Street is taking notice. The average forecast among analysts for Moderna’s 2022 revenue has jumped 35 percent since President Joe Biden laid out his booster plan in mid-August.

Most of the vaccinations so far in the U.S. have come from Pfizer, which developed its shot with Germany’s BioNTech, and Moderna. They have inoculated about 99 million and 68 million people, respectively. Johnson & Johnson is third with about 14 million people.

No one knows yet how many people will get the extra shots. But Morningstar analyst Karen Andersen expects boosters alone to bring in about $26 billion in global sales next year for Pfizer and BioNTech and around $14 billion for Moderna if they are endorsed for nearly all Americans.

Andersen expects Moderna, which has no other products on the market, to generate a roughly $13 billion profit next year from all Covid-19 vaccine sales if boosters are broadly authorized.

Potential vaccine profits are harder to estimate for Pfizer, but company executives have said they expect their pre-tax adjusted profit margin from the vaccine to be in the “high 20s” as a percentage of revenue. That would translate to a profit of around $7 billion next year just from boosters, based on Andersen’s sales prediction.

J&J and Europe’s AstraZeneca have said they don’t intend to profit from their Covid-19 vaccines during the pandemic.

For Pfizer and Moderna, the boosters could be more profitable than the original doses because they won’t come with the research and development costs the companies incurred to get the vaccines on the market in the first place.

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