Boosters could bolster billions for drug makers

Drugmakers like Pfizer and Moderna will soon be laughing all the way to the bank. Reason? Vaccine boosters could bolster billions for these and other drug manufacturers when compared to the original doses. These  boosters won’t be coming with R&D costs. 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. But what needs to be seen is how much manufacturers will gain. This depends on how big the rollout will be.

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

How boosters could bolster billions

As America moves forward in injecting boosters, this step will gather pace in the coming weeks.  Vaccines including boosters of vaccines made by Moderna and Johnson & Johnson will be injected to Americans. That, plus continued growth in initial vaccinations, could mean a huge gain in sales and profits for Pfizer and Moderna in particular. Thus it can be seen how boosters could bolster billions for these companies. “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% since President Joe Biden laid out his booster plan in mid-August.

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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. That’s how much boosters could bolster billions for these manufacturers.  

Those companies also may gain business from people who got other vaccines initially. In Britain, which plans to offer boosters to everyone over 50 and other vulnerable people, an expert panel has recommended that Pfizer’s shot be the primary choice, with Moderna as the alternative.

Almost pure profit

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. 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. Thereby it will be how boosters could bolster billions for these manufacturers.  

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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.
WBB Securities CEO Steve Brozak said the booster shots will represent “almost pure profit” compared with the initial doses.

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