All of the currently authorized coronavirus vaccines are highly efficacious -- and have even proven their power against the many variants that have gained ground since the start of the year. Pfizer (PFE +1.65%) and partner BioNTech have boasted particularly strong efficacy data, and the most recent follow-up from the companies' phase 3 trials showed 91.3% effectiveness.
Just recently, however, data out of Israel suggests the Pfizer vaccine may not work as well all of the time against the Delta variant. That's the coronavirus strain that began in India and has since become dominant in other parts of the world -- including the U.S. state of California. Let's take a look at the latest data and see whether it will upend Pfizer's position in the vaccine space.
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A drop in efficacy
In recent weeks, the Pfizer vaccine was only 64% effective in preventing the coronavirus, according to Israel's health ministry. But the vaccine's performance was stronger when it comes to avoiding the worst. It was 93% effective at keeping people out of the hospital, the ministry reported.
This applies to data collected from June 6 through the first days of July. The previous one-month period showed higher efficacy by both measures -- 94% efficacy in prevention and 98% efficacy in avoiding hospitalization, Politico reported. It's important to keep in mind that as time progressed, the Delta variant became more prevalent in Israel.
Israel has relied heavily on the Pfizer vaccine since the launch of its vaccination campaign. Therefore, the country is reporting real-world data regarding this particular vaccine.
It's difficult to make an apples-to-apples comparison of Pfizer to rivals such as Moderna or Johnson & Johnson. Moderna and J&J say their vaccines neutralized the Delta variant in in-vitro studies involving blood serum of vaccinated individuals. But we don't have exact numbers from a study in the population as we do with Pfizer in Israel. So we can't say for sure whether Pfizer is stronger or weaker than its peers against the Delta variant.
Regardless of the performance of Pfizer's rivals, some investors still may worry about the company. Will this efficacy decline hurt future use and sales of its vaccine? Probably not. Here's why: The big decline in efficacy is in overall prevention of coronavirus infection. This means the vaccine's ability to prevent infection -- at least according to Israel's latest numbers -- isn't as strong as it was during Pfizer's clinical trial.
Of course, this isn't great news. No one likes getting sick. But the reason COVID-19 has sparked fear globally isn't because of mild-to-moderate cases, it's because of the severe cases that have resulted in more than 3.9 million deaths globally.
Avoiding the worst
The main reason companies rapidly developed vaccines and the reason health officials urged populations to get these vaccines have to do with avoiding the worst outcomes. The goal was to prevent hospitalization and death. And Pfizer's doing just that. Israel's data shows efficacy on that point remains high.
All of that translates into continued market leadership for Pfizer. The company said during its last earnings report that it expects to generate $26 billion in sales this year for the vaccine. It splits that with BioNTech, but the vaccine still represents a major source of revenue. In fact, Pfizer predicts it will account for 36% of full-year revenue. And the company has already sealed major deals for the future. Most notable is a deal for as many as 1.8 billion vaccine doses for the European Union through 2023.
Unlike its biotech partner, Pfizer hasn't seen massive share gains thanks to vaccine sales.
Biotech companies generally get a bigger boost because they often depend on one or a few products. So a billion-dollar vaccine is a huge deal for such a player.
That doesn't mean Pfizer won't benefit at all. I expect to see share performance increase steadily over time as the vaccine contributes to revenue. And as long as the product continues to save lives, other efficacy details aren't likely to change the story.
