Pfizer, BioNTech's U.S. supply deal price tag leaves room for 'decent' profit on COVID-19 shot: analyst

The Trump administration made a major splash in the race for a COVID-19 vaccine this week with its $1.95 billion supply deal for Pfizer and BioNTech's shot. With 100 million doses due in the deal, the two companies stand to turn a profit on the agreement—and that's not such a bad thing, one analyst writes. 

Pfizer and BioNTech will sell their mRNA-based COVID-19 vaccine to the U.S. government at an estimated cost of $19.50 per shot, a price tag that will leave the companies with a "decent margin" of 60% to 80% profit, SVB Leerink analyst Geoffrey Porges wrote in a note to investors Wednesday. 

By Porges' lights, the two companies' $1.95 billion U.S. supply deal for 100 million doses, signed Wednesday, will provide a price-point "benchmark" for other COVID-19 vaccine makers who have not yet set a price tag and will not sell their shots for zero profit.

Pfizer and BioNTech's likely two-shot regimen, including a booster, would cost U.S. commercial payers around $40 and government payers like Medicare and the U.S. Vaccines for Children program, roughly $20, Porges wrote. Developing nations will also likely receive the companies' vaccine at $10 per shot, according to Porges, a figure that most vaccine makers might also pledge to meet for their own candidates. 

As part of their deal with the Department of Health and Human Services' (HHS) Biomedical Advanced Research and Development Authority (BARDA), 100 million doses of Pfizer and BioNTech's shot will be distributed at no cost to U.S. patients.

BARDA has also reserved the option to buy an additional 500 million doses of the vaccine. The taxpayer-funded $19.5 billion deal was the single largest bet put down by the Trump administration's Warp Speed initiative to rapidly develop and distribute COVID-19 shots. 

RELATED: Pfizer, BioNTech snare $1.95B deal with U.S. government for 100M-plus doses of COVID-19 vaccine