Fifteen billion dollars: That's how much Pfizer (NYSE:PFE) projected last month in its Q4 update that it will make this year from its COVID-19 vaccine, BNT162b2. Sure, the company splits profits equally with its partner, BioNTech (NASDAQ:BNTX), but we're still talking about a lot of money.
The actual amount will almost surely be even higher. Since Pfizer's update, the U.S. government has ordered another 100 million doses of BNT162b2. But could Pfizer's revenue from the vaccine be 50% higher because of another factor -- new "variants of concern" of SARS-CoV-2, the coronavirus that causes COVID-19?
Good things come in threes
Pfizer and BioNTech announced last week that they've begun a study to evaluate a third dose of BNT162b2. Why add another dose to the two-dose regimen that has already demonstrated an efficacy of 95%? Blame it on the new coronavirus variants.
The companies want to see whether an additional booster shot will provide greater immunity against new variants. Individuals who participated in the phase 1 clinical study of BNT162b2 conducted in the U.S. will be given an opportunity to receive a booster shot of the current version of the vaccine six to 12 months after their second dose.
The B.1.351 variant first identified in South Africa is one of the biggest worries among global healthcare leaders. Pfizer and BioNTech are talking with the U.S. Food and Drug Administration (FDA), and regulatory authorities in other countries, about another pivotal study to evaluate a version of BNT162b2 that specifically targets this variant.
Pfizer CEO Albert Bourla tried to alleviate concerns about the efficacy of the two-dose regimen of BNT162b2 that's already being given to millions of people. He said that "we have not seen any evidence that the circulating variants result in a loss of protection provided by our vaccine." BioNTech CEO Ugur Sahin referred to the two companies' moves as part of a proactive strategy being undertaken so that Pfizer and BioNTech will "be prepared for different scenarios."
A 50% jump in revenue?
Let's return to that $15 billion sales projection for BNT162b2. Pfizer arrived at that number based on a two-dose regimen of the vaccine. If a third dose is ultimately required, could Pfizer's revenue jump 50%? The math might seem sound. However, the underlying assumptions could prove to be shaky.
There are simply too many unknowns at this point. It remains to be seen if the B.1.351 variant will become widespread enough in the U.S. and other countries to overcome immunity from existing vaccines. Even if that happens, two doses of BNT162b2 could be effective enough that a booster dose isn't required.
It's also quite possible that a third dose of Pfizer and BioNTech's vaccine won't help very much in increasing efficacy against the new variants. We don't even know yet how often booster shots will be needed for vaccines designed to fight the original strain of SARS-CoV-2, never mind the new variants.
Perhaps most importantly, Pfizer stated that it's looking at developing a version of BNT162b2 that's variant-specific. By the time governments see the need for more effective vaccines for new variants, the company could have a new two-dose (or perhaps even single-dose) vaccine specifically designed for them.
Could Pfizer's revenue be higher if a third dose of BNT162b2 proves to significantly increase efficacy against B.1.351 and other variants? Perhaps. But don't count on a 50% increase.
An important takeaway
One factor could make a real difference in the growth prospects for the big pharma stock, though. More coronavirus variants of concern are almost assuredly on the way. The companies able to rapidly respond to these variants will be in the best positions to dominate the global COVID-19 vaccine market in the future.
I'd argue that Pfizer and BioNTech are well-prepared to target new variants. The companies' quick moves against the current strains show their desire to be proactive. Messenger RNA (mRNA) technology also offers some inherent advantages in rapid development of new vaccine versions. It's no coincidence that the Pfizer-BioNTech partnership and Moderna were first to market in the U.S. with their mRNA COVID-19 vaccines.
New coronavirus variants might not boost Pfizer's fortunes significantly this year. But we could see a much different story over the long run.