Americans have received more than 120 million COVID-19 vaccine doses. Another 2.4 million shots are administered every day. For the next several months, every adult in the United States who wishes to be vaccinated will be vaccinated.
But there is one big unanswered question that affects anyone who receives a COVID-19 vaccine: How long do the vaccines provide protection against a novel coronavirus infection? It’s not like the old TV game show The $ 64,000 question, although. How long COVID-19 vaccines last is a multibillion dollar question.
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Billions of dollars at stake
Pfizer (NYSE: PFE) and BioNTech (NASDAQ: BNTX) were the first to receive US Emergency Authorization (EUA) for their COVID-19 vaccine, BNT162b2. In February, Pfizer estimated the vaccine would have sales of around $ 15 billion this year based on supply contracts in place at the time.
However, since then the two companies have received additional orders for BNT162b2 – 100 million additional cans for the US and 200 million additional cans for the European Union. These stores should grow BNT162b2’s sales to over $ 20 billion in 2021.
Modern (NASDAQ: MRNA) won EUA for its COVID-19 vaccine mRNA-1273, shortly after Pfizer and BioNTech. The biotech company expects the vaccine to generate sales of $ 18.4 billion this year.
Johnson & Johnson (NYSE: JNJ) secured EUA for its single-dose COVID-19 vaccine End of February. The health giant is selling the vaccine at cost for around $ 10 per dose during the pandemic. J&J hopes to deliver at least 1 billion doses of its vaccine this year. Assuming this goal is achieved, the company will have sales of approximately $ 10 billion.
These three vaccines alone could gross in well over $ 48 billion this year. And we didn’t account for COVID-19 vaccine sales from AstraZeneca (NASDAQ: AZN) and Novavax (NASDAQ: NVAX)both of which could win US EEA in the near future.
The best guess right now
Nobody knows for sure how much of that huge revenue these companies will generate in 2021 will be recurring. In theory, COVID-19 vaccines could provide protection against infection for years. If so, vaccine sales would plummet in 2022.
On the other hand, suppose that booster doses are needed about every six months. This scenario would mean that Pfizer, Moderna, and the other companies could expect significant revenues each year.
The problem lies in our original question. We don’t yet know how long immunity will last from COVID-19 vaccines. There is a good reason for the puzzle: it has not been enough time since the first participants in clinical trials were fully vaccinated.
New variants could also be critical. While current COVID-19 vaccines offer long-lasting protection against existing coronavirus strains, the emergence of new virus variants could require more frequent booster vaccinations.
Probably the best guess for now is to follow Moderna CEO Stephane Bancel’s prediction that COVID-19 will be like the seasonal flu. Annual vaccinations are required if he’s right.
Potential winners and losers
A recurring COVID-19 vaccine market could be very different from what we see in 2021. Governments around the world are currently trying to get hold of every vaccine that has been approved or is likely to be approved. However, other factors may be important in the future.
As vaccines become large enough to meet demand, price becomes a bigger concern. This could benefit Johnson & Johnson as only a single dose is required for their vaccine. However, Moderna is evaluating a next-generation COVID-19 vaccine that could potentially also be given as a single dose. Don’t be surprised if Pfizer and Novavax, whose vaccines both have high two-dose efficacy, move forward with testing single-dose regimens.
Perhaps the most important differentiator going forward, however, will be how quickly companies can develop safe and effective vaccines against new coronavirus variants. That could give Pfizer / BioNTech and Moderna an advantage. Their messenger RNA technologies enable rapid development of vaccines.
AstraZeneca and Johnson & Johnson could be at a disadvantage due to their adenovirus delivery methods. It is possible for individuals to develop immune resistance to the adenoviruses used.
In general, when frequent booster injections are required, the biggest winners are likely to be the relatively smaller ones Biotech stocks instead of the big pharmaceutical stocks. BioNTech, Moderna and Novavax would feel the impact of heavy recurring revenue from sales of COVID-19 vaccines more than AstraZeneca, J&J and Pfizer. However, should COVID-19 turn out not to resemble seasonal flu, these biotech stocks would likely be the biggest losers.
When will we know the answer to the multibillion dollar question that is facing all these drug makers? We’ll likely at least have a pretty good sense of whether or not annual booster doses are needed in the fourth quarter. Then the participants in the Pfizer / BioNTech and Moderna late-stage studies are fully vaccinated for at least one year.
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