After coronavirus vaccines began to roll out, Moderna (MRNA +3.97%) and Pfizer (PFE +1.36%) emerged as the safest options; their mRNA vaccines weren't associated with any major side effects. At the same time, AstraZeneca and Johnson & Johnson -- makers of more traditional vaccines -- saw use of their vaccines slip. That's after a small number of individuals who received the AstraZeneca or J&J jab developed rare but sometimes deadly blood clots.
In recent weeks, however, Moderna's and Pfizer's safety situation has changed. Some teens and young adults developed heart inflammation following vaccination with their products; most of the cases happened in males. Now, the U.S. Food and Drug Administration (FDA) plans to include a warning statement in the product fact sheets.
Will these warnings hurt demand for the Moderna and Pfizer vaccines -- and eventually sales? Let's find out.
Image source: Getty Images.
About 1,000 cases
First, let's look at what's happened. Since April, the Vaccine Adverse Event Reporting System (VAERS) has collected reports of about 1,000 cases of myocarditis and pericarditis following mRNA vaccination, according to the Centers for Disease Control and Prevention (CDC).
Myocarditis is an inflammation of the heart muscle. In pericarditis, inflammation occurs in the heart's outer lining. An infection is often the trigger of both myocarditis and pericarditis: The body's immune system takes action and the result is inflammation. In the cases reported post-vaccination, the CDC said, patients received treatment and most of them quickly recovered.
This comes at a time when both companies aim to vaccinate a younger teen population. The FDA originally authorized the Pfizer vaccine for people ages 16 and older, but the agency recently broadened that authorization to include individuals as young as 12. Moderna applied for authorization in the 12-to-17 age group earlier this month, and is waiting for an FDA decision; Moderna's vaccine was originally authorized for those ages 18 and older.
Both companies hope to vaccinate as many teens as possible before the new school year begins. This represents a significant market. About 25 million people in the U.S. are in the 12-to-17 age group, according to the KIDS COUNT Data Center. That could mean up to 50 million doses of vaccine, as both Pfizer and Moderna are two-dose products. If we use the $15-per-dose price the U.S. paid in an early contract for the Moderna shot, that would equal about $750 million in sales.
The U.S. already has enough Pfizer and Moderna vaccine doses for the whole population -- including all age groups. The dose level for teens is the same as the dose for adults, so the U.S. doesn't have to order a new batch of vaccines just for this younger age group. This means we won't see a $750 million order right now. But if a great number of teens opt for vaccination now, it could mean bigger orders later. The U.S. is likely to order enough doses for the whole teen population in the future if demand is there.
Sales now and later
So, let's get back to the FDA warning statement. It won't hurt vaccine sales right now. It could hurt future sales -- if the risk worries parents and they don't choose vaccination for their teens. But I don't think this is likely to happen.
First, the number of heart inflammation cases is small, in the context of total vaccination numbers. As of today, Pfizer and Moderna have fully vaccinated more than 139 million Americans. The 1,000 cases of heart inflammation reported show us that the risk of this side effect is quite low. And second, the CDC emphasizes that the benefit of getting a vaccine outweighs the risk. These two factors should easily tip the balance in favor of vaccination -- at least for most parents and teens.
All of this means investors shouldn't worry about the FDA warning label. It's unlikely to impact demand for Moderna and Pfizer vaccines. And as a result, it's unlikely to nudge these companies out of their leadership positions in the coronavirus vaccine market.
