On the heels of Pfizer's $1.95 billion COVID-19 vaccine deal with the U.S. government, one analyst says the drugmaker could earn many more billions in revenue on its potential vaccine—if the program succeeds.
At $1.95 billion for 100 million doses, Pfizer's deal sets a price-per-dose of $19.50, which Bloomberg Intelligence analyst Sam Fazeli sees as a "precedent" for other groups operating on a profit model, he said in a radio interview. The deal is contingent on success in the clinic and delivery of 100 million doses.
Pending success for a one-dose regimen, Fazeli’s team calculated a potential “windfall of more than $15 billion" for the company, according to a note seen by Bloomberg. A spokeswoman told the news service that Pfizer is pursuing a two-dose regimen.
Under that two-dose regimen, the $39 price for the course would be “almost 30% less than what others charge for a seasonal flu vaccine," she told Bloomberg. The price incorporates “public health requirements during the pandemic,” she said.
Pfizer's deal also includes an option for another 500 million doses, RBC Capital Markets analyst Randall Stanicky pointed out, so "investors are increasingly seeing real opportunity here."
At a virtual conference (PDF) last month, Pfizer CEO Albert Bourla said it's not "business as usual" for the company amid the pandemic and that it would be unethical for the company to price based on "open-market principles." Still, there's a "huge commercial opportunity," he said. The company never entered its research in pursuit of a return on investment, he said, and rather sought a "return on effort."
Pfizer and partner BioNTech haven’t taken financial help from governments in developing their vaccine candidates, so their pricing considerations are likely different from companies that have received R&D support. AstraZeneca's deal with the U.S. government comes out to $4 per dose, Fazeli said. That company has received development dollars, and it has pledged to not profit off of the vaccine under the deal.
Previously, analysts with Jefferies predicted Moderna, another COVID-19 vaccine front-runner, could earn $5 billion in revenue or more by pricing its vaccine at $50 per dose. But after Pfizer unveiled its price of less than $20 per dose, it remains to be seen how Moderna will approach pricing. The biotech on Monday received another $472 million in R&D funding from the U.S. government, taking its total to about $955 million.
Moderna and Pfizer both started late-stage testing on Monday. Also Monday, Reuters reported that Pfizer's talks with Europe have run into complications over price.