Please ensure Javascript is enabled for purposes of website accessibility

How Profitable Is Coronavirus Vaccine Development?

By Brian Orelli, PhD – Oct 21, 2020 at 9:10AM

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 prices for the first batches of the vaccine have already been set.

In this Fool Live video, Healthcare and Cannabis Bureau Chief Corinne Cardina and longtime Motley Fool contributor Brian Orelli discuss whether there's money to be made from the coronavirus vaccines being developed by AstraZeneca (AZN -0.96%), Moderna (MRNA 0.09%), Pfizer (PFE -0.92%), BioNTech (BNTX -0.13%), and others. Investors know the initial sales prices of the vaccines because they've been pre-sold to government entities. The big question is whether there will be pressure to sell additional vaccine at close to cost. Fortunately, looking at the cost of flu vaccines, the current prices seem quite reasonable.

10 stocks we like better than Moderna
When investing geniuses David and Tom Gardner have a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.*

David and Tom just revealed what they believe are the ten best stocks for investors to buy right now... and Moderna wasn't one of them! That's right -- they think these 10 stocks are even better buys.

See the 10 stocks

 

*Stock Advisor returns as of September 24, 2020

 

Corinne Cardina: We got a question from a nurse of an ICU that deals with COVID. He or she, JohnnyRN says, "Hi, Doc. I am a RN of an ICU that deals with COVID. One concern I have with investing in these biocompanies is that if they get a vaccine or a better treatment preventing it is that if a company does find a vaccine, how profitable will they be? I worry that they pretty much will have to give it away for cost or a small gain because the ethics of jacking up the price. Look at what happened to the CEO of the company that makes EpiPens." I think that's Mylan. "How profitable do we think that they will be if they are the first with the vaccine?"

There's a lot of public pressure that is going on with the vaccine stocks, but a lot of countries and governments have bought up vaccines in advance of an approval. I imagine a lot of the money is coming from these large government contracts. Any thoughts on that?

Brian Orelli: Yeah. I think we already know the price because they've been disclosing how much they're paying. Then you know how many doses they're paying for and you know what the contract is. You can figure out the price per dose. They're in the $10-$20 range, so that's what the government's paying for the vaccine. I don't imagine it will be much higher for individuals. There's some costs in terms of paying the doctor or the pharmacist or the nurse to give the vaccine, but I think the government is going to pay for most if not all of the vaccine.

So I don't think there's going to be more pressure than the current cost. You can look at influenza vaccines as a baseline cost, and they're in the $10-$20, they go all the way up to $50 or $70 for the cost that the companies end up making on the vaccines.

Brian Orelli, PhD and Corinne Cardina have no position in any of the stocks mentioned. The Motley Fool recommends Mylan. The Motley Fool has a disclosure policy.

Premium Investing Services

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