February 15, 2021 BARRON’S 13
point to upstarts likeNovavax
(NVAX) andModerna(MRNA),
which haven’t had to hire huge sales
forces, and can ship their doses right
to government warehouses, rather
than wrestle with distribution.
“It suits our company very well,”
Novavax CEO Stanley Erck tells
Barron’s. “It gives us time to become
a big guy in vaccines.”
What’s more, the pandemic has
accelerated the arrival of next-genera-
tion vaccine technologies developed
by smaller biotechs. Some, likeBioN-
Tech(BNTX), have teamed up with
vaccine giants, but others, like Mod-
erna and Novavax, are going it alone.
Novavax and its partners say they
will be making 150 million doses of
their vaccine a month by the second
half of the year, and Moderna says it
will make at least 600 million doses
this year, and potentially as many as
a billion. That’s a world-leading level
of vaccine production: Sanofi, by con-
trast, made 250 million doses of its flu
vaccine for this flu season. That capac-
ity could pose a long-term challenge,
and the upstarts have big ambitions.
Novavax has tested a flu vaccine of its
own, and is working on a vaccine that
protects against both flu and Covid-19.
And Moderna has a packed vaccine
pipeline.
Nearly a year into the pandemic,
the U.S. Food and Drug Administra-
tion has authorized two vaccines
based on the cutting-edge messenger
RNA technology, from Moderna and
Pfizer, and is currently considering a
vaccine based on the similarly cutting-
edge viral vector technology, from
Johnson & Johnson(JNJ). A viral
vector vaccine fromAstraZeneca
(AZN) has been authorized in Europe,
while Novavax, which uses a version
of the more established protein sub-
unit vaccine approach, has begun to
submit authorization requests.
There is a chance that the current
vaccines could be enough to stop the
virus. But in recent weeks, data show-
ing that the AstraZeneca, Novavax,
and Johnson & Johnson vaccines were
all less effective against the strain
dominant in South Africa have led to
a growing sense that boosters protect-
ing against additional strains could be
needed in the very short term.
“It looks like there will be at least
one more round of vaccination boost-
ings somewhere around the end of the
year to the first half of next year,” says
Ronny Gal, an analyst at Bernstein.
Johnson & Johnson CEO Alex Gor-
sky told CNBC this past week that
annual boosters could be necessary
for at least the next several years.
The size of this market is impossi-
ble to predict, but companies are
making the case that it will be mas-
sive. Pfizer expects $15 billion in
Covid-19 vaccine revenue in 2021, 2½
times as large as its best-selling prod-
uct in 2020. If the need for annual
boosters persists, it could remain
material not just for small companies
like Novavax, but also for the biggest
players.
Yet because of the conditions of the
pandemic, the market could be more
wide open than any other large vac-
cine market in recent history. For
investors, there is an opportunity to
make a bet on disruption in an indus-
try that hasn’t seen a shake-up in
decades. Still, the big players in the
industry aren’t lying down.
In addition to the companies with
vaccines in production, Sanofi and
GlaxoSmithKline are collaborating
on a vaccine that may enter the mix.
Pfizer, which has presented some
of the best efficacy data for its
Covid-19 vaccine, seems the most
confident that the vaccine will be a
valuable long-term asset. On an earn-
ings call in early February, the com-
pany’s chief financial officer, Frank
D’Amelio, said that Pfizer’s typical
vaccines cost almost nine times more
than the current price charged for the
Covid-19 vaccine.
Pfizer executives say that they’ll
win in any head-to-head fight for
market share.
“If we move into much more nor-
mal situations, then there will be a
choice that physicians will have to
recommend,” Pfizer CEO Albert
Bourla tellsBarron’s.“I think we will
get the lion’s share. Because, first of
all, our data are spectacular, and who
wants to do a lesser vaccine?”
It may be a while before patients
have a choice as to which vaccine they
get. The Biden administration says the
the U.S. will have 600 million total
doses of the Moderna and Pfizer vac-
cines by July, enough to inoculate
most of the population.
How vaccine purchasing and distri-
bution will work after that is anyone’s
guess. That’s a wild card that will have
significant implications for how the
competition unfolds among the major
vaccine developers.
The vaccine market is fundamen-
tally different from the market for
other drugs and, aside from a hand-
ful of products, is largely driven by
big contracts rather than consumer
and physician choice. Patients usu-
ally don’t know which flu vaccine
they buy, and vaccine makers gener-
ally compete with one another on
price.
Pandemic Recasts
The Vaccine Business
Annual Covid-19 booster shots are likely, which would lift sales.
And the crisis has enabled biotech upstarts to compete with the giants.
Calling the Shots
How the current leading makers of Covid-19 vaccines compare:
2021E Sales(bil)
Recent 12-Mo. Covid-
Company / Ticker Price Chng Vaccine Total
Pfizer/PFE $34.74 -4% $12.5 $60.
Johnson & Johnson/ JNJ 166.81 10 N/A 91.
AstraZeneca/ AZN 49.97 0 N/A 30.
Modena/MRNA 179.34 740 10.0 10.
Novavax/NVAX 298.36 4,038 3.4 3.
N/A=Not available. E=Estimate. Source: FactSet
By JOSH NATHAN-KAZIS
Healthcare
workers adminis-
ter the Pfizer-
BioNTech..................................
vaccine in the
Bronx. Pfizer
expects $
billion in Covid-
vaccine revenue
this year.
V
accines have long been a
sleepy little corner of the
pharmaceutical industry,
dominated by a handful
of companies that sell bil-
lions of dollars worth of
vaccines a year, unper-
turbed by upstarts.
The pandemic is about to make
that corner a lot more crowded.
How the next phase of the effort to
vaccinate the world against Covid-
will play out is uncertain. What is
clear, however, is that as Covid-19 vac-
cine supplies increase and the market
turns private, the dominance of the big
four publicly traded vaccine makers—
Pfizer(ticker: PFE),Merck(MRK),
GlaxoSmithKline(GSK), andSanofi
(SNY)—could be challenged.
Angus Mordant/BloombergThe pandemic has offered an entry
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