Please ensure Javascript is enabled for purposes of website accessibility

Could a Vaccine Warning Label Hurt Moderna and Pfizer?

By Adria Cimino - Jun 28, 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

The FDA mentions cases of heart inflammation in young people.

After coronavirus vaccines began to roll out, Moderna (MRNA 3.27%) and Pfizer (PFE -0.72%) 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.

A healthcare worker vaccinates a person in a medical office.

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.

Adria Cimino has no position in any of the stocks mentioned. The Motley Fool recommends Johnson & Johnson and Moderna. The Motley Fool has a disclosure policy.

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

Moderna, Inc. Stock Quote
Moderna, Inc.
$176.78 (3.27%) $5.60
Pfizer Inc. Stock Quote
Pfizer Inc.
$49.75 (-0.72%) $0.36

*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
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 08/16/2022.

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.