Here's a prediction for 2021 that doesn't require any fortune-telling skills at all: Pfizer's (PFE -3.85%) COVID-19 vaccine will soon become a megablockbuster. The big drugmaker's U.S. and European Union supply deals alone make it a certainty that BNT162b2 will rake in billions of dollars in sales soon.
Bernstein analyst Ronny Gal estimates that BNT162b2 will generate more than $14 billion in revenues next year, split equally between the big drugmaker and its partner, BioNTech (BNTX -1.57%). So Pfizer should make roughly $7 billion from its COVID-19 vaccine in 2021. But the company has another vaccine on the way that could be an even bigger winner over the long run.
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A bigger prize?
Pfizer's best-selling product right now is the pneumococcal vaccine Prevnar 13, which is on track to generate sales of more than $5.5 billion this year. That's a little below Prevnar's 2019 revenue total. The decline was due in part to the impact of the pandemic.
Prevnar will lose patent protection in 2026. However, Pfizer has a worthy successor waiting in the wings. The Food and Drug Administration is scheduled to make an approval decision for PF-06482077 in June for use in individuals ages 18 and older. This 20-valent pneumococcal conjugate vaccine covers the 13 bacterial strains addressed by Prevnar 13, plus seven other strains.
That expanded protection against pneumococcal disease should translate to an expanded market for the new vaccine compared to Prevnar 13. Cantor Fitzgerald analyst Louise Chen thinks that the global market for 20-valent pneumococcal vaccines will be between $7 billion and $10 billion annually over the next 10 years.
A significant part of this potential market, though, will be in immunizing infants. Pfizer began a late-stage study earlier this year evaluating PF-06482077 for pediatric use. That trial should wrap up in 2022.
A fly in the ointment
The path for PF-06482077 to become a bigger moneymaker for Pfizer than BNT162b2 is not obstacle-free, however. A major rival hopes to also capture part of the lucrative pneumococcal vaccine market.
Last month, Merck (MRK 2.93%) filed for U.S. and European approvals for V114, which, as a 15-valent pneumococcal vaccine, targets more bacterial strains than Prevnar 13 does, but fewer than PF-06482077. However, Merck is ahead of Pfizer in advancing its candidate into late-stage studies for immunizing infants.
It seems quite possible, if not probable, that Merck's V114 will be successful enough to prevent Pfizer from dominating the pneumococcal vaccine market. Does that mean that there's no chance for PF-06482077 to become a bigger winner than Pfizer's COVID-19 vaccine? Not necessarily.
Ronny Gal thinks that the coronavirus vaccine market will fall to around $6 billion annually after 2021. Moderna's mRNA-1273 has an edge over BNT162b2 in that it doesn't require ultra-cold storage. Other vaccines that also hold competitive advantages could soon win authorizations, too. If Gal's estimate is right, Pfizer's revenues from BNT162b2 sales could plunge within the next couple of years -- clearing the way for PF-06482077 to potentially generate a greater amount of revenue over the long run.
It's possible, though, that Gal's projections are way off. His model assumes that booster COVID-19 shots will be needed only every three years. If Pfizer can generate strong annual recurring revenue from BNT162b2, that vaccine just might be a bigger winner than either Prevnar 13 or PF-06482077. A lot of money hinges on the unanswered question about the duration of protection provided by COVID-19 vaccines.
Part of a bigger picture
Maybe Pfizer will have a more successful vaccine on the way than BNT162b2, and maybe not. It's too soon to know how the COVID-19 and pneumococcal vaccine markets will shake out. However, the key takeaway for investors is that both of Pfizer's surefire blockbuster vaccines are only part of a bigger picture.
The growth prospects for the big pharma stock appear to be better than they've been in a very long time. And thanks to its spinoff-merger of Upjohn with Mylan to form Viatris, Pfizer's performance will no longer be weighed down by older drugs that are losing market share. The company has multiple products with strong sales growth plus a promising pipeline that goes beyond just its vaccine candidates.
Regardless of whether or not PF-06482077 turns out to be a bigger winner than BNT162b2, Pfizer seems poised to be a bigger winner over the next decade than it has been in recent years.
