Among the ever-growing collection of biopharma companies developing COVID-19 vaccines, Pfizer is emerging as a clear frontrunner—even after CEO Albert Bourla vowed not to seek emergency use authorization from the FDA prior to the election.
But if the company is indeed the first on the market anyway, how much will it boost the company's top line? And what will that be worth to investors?
Analysts at SVB Leerink took a crack at answering those questions in a note sent to investors Wednesday. Assuming an 80% chance of success for Pfizer’s coronavirus vaccine, they said, the product will peak at sales of $3.5 billion next year before flattening out at about $1.4 billion a year after that.
After analyzing immunology and epidemiologic trends during the pandemic, SVB Leerink analysts “expect the virus to become endemic in the human population,” they wrote. “Our current assumption is that vaccinees will need to be revaccinated every two years or so to maintain protective immunity.”
The analysts assumed there would be about 80% uptake of the vaccine among healthcare workers and high-risk adults, including the elderly and people with chronic illnesses. They forecast about 50% uptake among low-risk adults, and after 2022, children.
SVB Leerink estimated that the price of the vaccine would be $30 per dose in the U.S. and $23 overseas, with gradual price drops over time.
Pfizer is developing its vaccine candidate, BNT162b2, with BioNTech, and the SVB Leerink analysts are assuming there will be an even profit split between the two. But it could be a significant profit, they said, given the urgency among politicians and the general populous to put an end to the pandemic.
“We assumed high operating margin around 75%-80% initially, with minimal sales and marketing expense, which is different from other pharmaceutical products,” SVB Leerink said.
The analysts made several other key assumptions. For example, they’re guessing that the first generation of COVID-19 vaccines will only be 65% effective and that better vaccines will eventually enter the market. They still expect Pfizer and BioNTech’s vaccine to hold about 50% market share, but they assumed that FDA emergency authorizations for COVID vaccines from Johnson & Johnson and Moderna will come this year, with Novovax, AstraZeneca and Sanofi/GlaxoSmithKline getting the go-ahead in the first half of next year.
Ultimately, Pfizer’s share of the COVID-19 vaccine market will fall over time to 25%, SVB Leerink predicted.
So what is the COVID-19 vaccine worth to Pfizer investors? The company’s stock was trading at $37.49 per share when SVB Leerink put out its report. The analysts said it's worth just a bit more: $42.
A COVID-19 vaccine won’t be a goldmine for Pfizer because the company is facing significant challenges in other markets, they explained. Pfizer is divesting its consumer business to GSK and its legacy primary care drugs to Mylan, leaving “almost a pure-play specialty biopharmaceutical company, with major businesses in oncology, rare diseases, and vaccines,” the analysts wrote.
But its Prevnar pneumonia vaccine franchise is facing competitive pressure from Merck, and its oncology unit recently suffered a major disappointment: Ibrance failed a trial in early HR-positive, HR-negative breast cancer patients. The inability for Pfizer to crack the adjuvant breast cancer market leaves “a significant hole in the company’s oncology portfolio,” SVB Leerink said.
As for the exact timing of Pfizer’s COVID-19 vaccine, CEO Bourla has said the company won’t apply for emergency use authorization prior to the third week of November. Still, with 39,862 patients enrolled in the trial—most of whom have already received the required second dose of the vaccine—the company is on track to win emergency authorization by the end of the year, SVB Leerink said.