Please ensure Javascript is enabled for purposes of website accessibility

Here's the Biggest Challenge Pfizer Faces Right Now

By Adria Cimino - Apr 13, 2021 at 6:00AM

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

Communication may be the only way to overcome it.

It's fair to say Pfizer (PFE -0.23%) has become a coronavirus vaccine powerhouse. The big pharma company landed the first Emergency Use Authorization (EUA) for a COVID-19 vaccine in December. And it has managed to stay ahead of rivals so far. It's fully vaccinated more than 35 million people in the U.S. That's compared to 30 million for Moderna and 6 million for Johnson & Johnson.

Pfizer and partner BioNTech expect the vaccine to generate about $15 billion in revenue this year. Now, they're going after a broader audience that could boost sales further in the years to come. Pfizer just requested an EUA for use of its vaccine in individuals ages 12 through 15. That's after reporting positive trial data. The current authorization covers people ages 16 and older. All of this sounds great. But, if the U.S. Food and Drug Administration (FDA) gives Pfizer the nod, there's one big challenge the company faces.

A mom hugs her teenage daughter in their living room.

Image source: Getty Images.

The most vulnerable

Older people have been among the most vulnerable to the coronavirus since the start of the pandemic. The number of cases in younger people has increased. But deaths still remain extremely low in younger groups. For example, 0.1% of deaths have been in Americans ages 5 through 17, according to the Centers for Disease Control and Prevention (CDC). More than 31% of deaths have been in people ages 85 and older.

And in many instances, kids and teens who have contracted COVID-19 have been asymptomatic or have had mild cases. So, the big challenge Pfizer faces is actually getting parents to sign their kids up for a vaccine. My colleagues Keith Speights and Brian Orelli had an interesting conversation about this on Motley Fool Live recently.

Parents may eagerly opt for vaccination if their teens are in a high-risk group. Otherwise, some may just skip it. What could change this and potentially increase teen vaccination rates? Communication from vaccine makers, the government, and healthcare providers. If health officials explain the importance of vaccinating all age groups, that could tip the balance in favor of vaccination.

Two reasons to vaccinate

There are two important reasons to vaccinate this group. First, kids and teens are key to reaching herd immunity. Experts say about 50% to 80% of the population must be immune to the virus to reach that stage. People under age 18 make up 22% of the U.S. population. And second, vaccination helps reduce transmission of the virus. If fewer people are sick -- asymptomatic or symptomatic -- fewer viral particles are shed into the community. And that lowers the risk for more vulnerable people.

Ideally, if parents support vaccination, this could be a big revenue opportunity for Pfizer. More than 25 million individuals in the U.S. are between the ages of 12 and 17, according to Kids Count data. That means 50 million doses are needed for this group. Using the $19.50 a dose price the U.S. paid for Pfizer vaccines, this represents $975 million in sales for the company. It's logical to imagine global sales could reach into the billions -- just for this age group.

And Pfizer is likely to enter this market first. Moderna also is testing its vaccine in this age group, but it hasn't yet reported data. If Pfizer lands an EUA even a few weeks ahead of Moderna, it could gain significant market share. Parents who do want vaccinations for their kids will scramble to get it done before the back-to-school period.

A lot of good news

There's a lot of good news here for Pfizer, including a potentially billion-dollar global market and the ability to reach this market ahead of rivals. But the possibility of low interest from parents could put a serious dent in revenue prospects.

Now the question is: Should this be a big worry for investors? And the answer is no. As I mentioned earlier, the coronavirus vaccine already is generating blockbuster-level sales for Pfizer. And that won't change even if teen vaccination rates are low.

I see the teen market as a plus -- but right now it's not a "make-it-or-break-it" opportunity. It may take a while to win parents over. And that's OK. Meanwhile, as long as Pfizer's overall coronavirus vaccine revenue and orders continue to grow, there's reason to be optimistic about the company's role in this dynamic market.

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.
PFE
$52.31 (-0.23%) $0.12
Johnson & Johnson Stock Quote
Johnson & Johnson
JNJ
$179.52 (1.13%) $2.01
Moderna, Inc. Stock Quote
Moderna, Inc.
MRNA
$149.95 (4.97%) $7.10
BioNTech SE Stock Quote
BioNTech SE
BNTX
$157.50 (5.63%) $8.40

*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
316%
 
S&P 500 Returns
112%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 07/05/2022.

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.