We've all known for quite a while that Pfizer (PFE 0.76%) was likely to make billions of dollars from its COVID-19 vaccine. Granted, the big drugmaker has to share any revenue generated with its partner, BioNTech (BNTX 0.43%). But a lot of money is about to begin flowing into Pfizer's coffers thanks to Comirnaty, the brand name the company bestowed on COVID-19 vaccine BNT162b2.
Whatever amount you might have expected from Comirnaty, you might want to add to it. Here's why Pfizer will make more money than originally expected in 2021 from its coronavirus vaccine.
COVID dose confusion
After Pfizer's and BioNTech's COVID-19 vaccine began shipping in December, healthcare providers began noticing that there was an extra dose available in vials. There was some initial confusion about whether or not to use the extra dose, since the label on Comirnaty states that the vials contain five doses. However, that confusion was soon put to rest.
The drugmaker's contract with the U.S. government states that 200 million doses of Comirnaty will be provided. There's no reference to a specific number of vials, but the U.S. Food and Drug Administration (FDA) emergency use authorization (EUA) for the COVID-19 vaccine specified that there were five doses per vial.
However, earlier this month, Pfizer convinced the FDA to change the EUA wording from five doses per vial to six doses per vial. That clears the way for the company to receive payment for those extra doses.
Most of the headlines related to Pfizer's successful negotiation with the FDA talked about how the big drugmaker will now ship fewer vials to satisfy its commitment to the U.S. government. However, I think the bigger story is that Pfizer will make more money this year as a result of its extra dose per vial.
Pfizer didn't just get authorization language changed in the U.S. The company also convinced the World Health Organization and the European Medicines Agency to approve changes that reflect Comirnaty has six doses per vial.
These revisions were enabled Pfizer to increase its estimate of how many doses it will produce this year from 1.3 billion to 2 billion. There were other factors behind this adjusted projection, but an extra dose per vial equates to around 260 million additional doses produced in 2021.
Pfizer and BioNTech will probably be able to sell all of its increased number of doses made. Calculating how much additional revenue this capacity boost will generate for the companies isn't simple. Different supply deals have different price tags. For example, the European Union pays less for Comirnaty than the U.S. does for various reasons. However, it's possible that Pfizer and BioNTech could each make in the ballpark of $2 billion more this year than initially predicted.
You might think that investors would be pleased that Pfizer's revenue will be higher than anticipated, but its shares are basically flat year to date. Pfizer almost seems to be like the Rodney Dangerfield of pharmaceutical stocks. To paraphrase the late comedian's most famous punch line: Pfizer don't get no respect.
The company has a megablockbuster on its hands with Comirnaty. Pfizer is set to deliver much stronger growth than in recent years even without its COVID-19 vaccine, thanks to merging its Upjohn unit with Mylan to form Viatris. What will it take for Pfizer to gain respect from the market? If a 10-figure boost to its revenue with minimal effort doesn't accomplish the goal, I'm not sure what will.