Coronavirus vaccine leaders Pfizer (NYSE:PFE) and Moderna (NASDAQ:MRNA) announced earlier this year that they'd launched clinical trials of booster shot candidates -- and you could almost hear the world's collective sigh of relief. As coronavirus variants gained ground, everyone's big worry was staying ahead of them. Boosters may help because they offer the already vaccinated person's immune system an extra push.
Moderna has said it aims to bring a booster to market this fall. And Pfizer just last week said it's ready to file for regulatory approval of its third-shot booster candidate in the coming weeks. On the same day as Pfizer's news, the Centers for Disease Control and Prevention (CDC) and the U.S. Food and Drug Administration (FDA) delivered a startling message. One that could upset Pfizer's and Moderna's booster plans.
No need for a booster
"Americans who have been fully vaccinated do not need a booster shot at this time," the agencies said in a joint statement.
The reason? Today's vaccines are very efficacious against the original coronavirus and variants so far. And they're especially effective at protecting people from hospitalization and death.
This is true. Pfizer and Moderna both have reported six-month follow up data from their phase 3 trials. Their vaccines boast overall efficacy of 91.3% and more than 90%, respectively. And both companies have performed in vitro tests that demonstrate satisfactory vaccine efficacy against variants of concern.
So... maybe the U.S. health agencies are right? And maybe this means the companies' chances of selling boosters are getting pretty slim? Wait a minute. Let's not get ahead of ourselves.
First, let's talk about whether the CDC and FDA are right. Technically, they may be right this very moment. The Delta variant -- the strain originating in India -- is becoming more and more prevalent. But overall, coronavirus cases in the U.S. have dropped considerably since April. So, there is evidence the vaccines we have are doing their job. Without the help of boosters.
But Pfizer and Moderna themselves have warned of waning immunity several months after vaccination. In the U.S., the new number of vaccine doses administered peaked in early April. That means by October, all of those vaccinated in April and earlier probably should start thinking about getting a booster. Pfizer's CEO has said a booster likely will be needed six to 12 months after initial vaccination.
Efficacy is declining
Real world data out of Israel also indicates boosters may be needed sooner rather than later. The Pfizer vaccine -- the vaccine Israel has relied on -- showed only 64% efficacy in preventing the coronavirus last month, according to the country's health ministry. Its efficacy in avoiding hospitalization and death still remains high at 93%. That's the most important goal of the vaccine. But a decline in overall efficacy isn't a trend we want to see continuing. Thus, the need for a booster to give immunity a lift.
In my opinion, the CDC and FDA won't be right for very long. If current trends continue, the agencies may find themselves revising their statement by fall -- that's the moment Pfizer and Moderna expected to launch booster shots anyway.
And this leads us to my next point. The CDC and FDA statement today probably won't hurt eventual sales and use of booster shots. The agencies' comments pertained to what's happening right now. Many people have been freshly vaccinated and immunity is strong. But, as mentioned earlier, Pfizer, Moderna and other experts have given us a potential timeframe for immunity. That means boosters by fall or winter are pretty much inevitable. And that equals demand for these shots before the end of the year.
So, yes, the message from the CDC and FDA surprised many of us. But it doesn't represent difficulties ahead for Pfizer's and Moderna's booster candidates. Even if the coronavirus situation improves, boosters still will be needed as part of the companies' planned vaccination regimens. So, for vaccine stock investors -- and the companies themselves -- revenue expectations are still very much on track.