Please ensure Javascript is enabled for purposes of website accessibility

Pfizer Outsources Branded Drug Production to Focus on Experimental Coronavirus Vaccine

By Cory Renauer - Updated May 9, 2020 at 1:24PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The big pharma giant will outsource the production of medicines it sells now for a chance to halt the virus responsible for COVID-19 in its tracks.

Pfizer (PFE 3.73%) is taking on significant risk in a race to provide the world with a coronavirus vaccine. Pfizer is outsourcing the production of its own branded medicines to contract manufacturers such as Catalent (CTLT -0.29%) to make room for the production of, BNT162, an experimental SARS-CoV-2 vaccine the big pharma is developing in partnership with BioNTech (BNTX 1.33%).

Investing in risk

The steps Pfizer is taking to ramp up the production of an experimental vaccine candidate that hasn't produced any clinical trial data yet are an extremely unusual gamble. Having millions of doses of BNT162 ready to ship out the moment it's potentially approved, though, could make it all worthwhile.

Rack of blood samples with bar codes.

Image source: Getty Images.

BioNTech is supplying investigators with its vaccine candidates, which recently began clinical trials in the U.S., but Pfizer will be responsible for the bulk of manufacturing if it's proven effective at preventing transmission of the virus responsible for COVID-19.

At the moment, BNT162 is actually a program that will test four similar vaccines in early clinical-stage testing before settling on a single candidate for later development stages. Instead of paying Catalent to manufacture millions of doses of an experimental vaccine candidate that might never leave the warehouse, Pfizer will handle BNT162 production in its own facilities.

Pfizer says it will cost up to $150 million to prepare its facilities to produce BNT162. By freeing up some of its largest facilities, though, the company thinks it could distribute up to 20 million coronavirus vaccine doses before the end of 2020.

Cory Renauer has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Pfizer Inc. Stock Quote
Pfizer Inc.
$50.09 (3.73%) $1.80
Catalent, Inc. Stock Quote
Catalent, Inc.
$109.62 (-0.29%) $0.32
BioNTech SE Stock Quote
BioNTech SE
$160.70 (1.33%) $2.11

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 08/12/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.