It's fair to say that Pfizer (NYSE:PFE) and Moderna (NASDAQ:MRNA) are dominating the coronavirus vaccine market these days. Their vaccines have fully immunized 86 million and 62 million Americans, respectively. They both entered the market first, so they have an advantage over rivals from a timeline perspective.
Of course, that doesn't mean market dominance will last forever. Competition right now comes in the form of Johnson & Johnson (NYSE:JNJ). And Novavax may be next to enter the market.
Still, one piece of recent news opens up new possibilities for Pfizer and Moderna. And it could very well hand the vaccine market over to them for the foreseeable future.
It begins with delta
It all starts out with the delta variant, the highly contagious coronavirus strain that was first identified in India. Since then, it's spread to other countries, and now it's the dominant strain in the U.S. This new strain is a reason behind the latest spike in coronavirus cases and hospital admissions.
As delta gained ground, Pfizer, Moderna, and J&J each tested their vaccines in vitro against the variant. The good news? All three companies said their vaccines provided protection against delta.
And then came a study out of New York University. The researchers studied blood samples from J&J-vaccinated individuals and people vaccinated by Moderna and Pfizer. Data showed that the J&J samples didn't fend off the delta variant as well as the Moderna and Pfizer samples. The study hasn't yet been peer reviewed.
The significant point here is this: The researchers suggest that those who receive J&J could benefit from a second shot. And they're hoping for a future follow-up with a second J&J dose or a boost from Pfizer or Moderna, study leader Nathaniel Landau told The New York Times.
The big advantage of the J&J shot is that it's only one dose. And that point made many opt for this particular vaccine. Now, if the idea of a second shot is on the table, those already vaccinated with J&J may opt for a dose of Pfizer or Moderna. Why? Because of the products' strong efficacy and the possibility of a greater boost to immunity.
Two-dose shots Pfizer and Moderna have come out on top in terms of efficacy -- and that's even before the delta variant appeared. The companies reported effectiveness of more than 90% against coronavirus of all degrees of severity. That's compared to J&J's 66% efficacy against moderate-to-severe illness.
Some early studies suggest two different styles of vaccine could produce a strong immune response. In this case, that would be an mRNA vaccine such as Pfizer or Moderna -- and an adenovirus vaccine like J&J.
An mRNA vaccine works by offering the body instructions to produce a key coronavirus protein. An adenovirus vaccine uses a common inoffensive virus as a shell to deliver coronavirus genetic code to make the protein. In both cases, the body learns to recognize this protein and can then fight off infection.
So far, more than 12 million Americans have been vaccinated with the J&J vaccine. If many of them opt for a Pfizer or Moderna dose to boost their immunity, that expands those companies' share of the market.
But more importantly, it may hand over the future market to them on a silver platter. Here's why: If people know they'll have to get at least two vaccine doses annually, for example, they'll probably opt for the most efficacious vaccines. And that leads us to Pfizer and Moderna.
What may happen
The result would be a slow erosion of J&J's market share in favor of today's market leaders.
How likely is this to happen? It's too early to say. There are plenty of reports of individuals getting Pfizer or Moderna shots after a J&J vaccine. But health officials haven't recommended mixing vaccines. In fact, they haven't even recommended that those fully vaccinated with Pfizer or Moderna get a booster of those vaccines.
U.S. health authorities recently said that people who are fully vaccinated are protected against severe disease -- even with delta circulating. They referred to those vaccinated by Pfizer, Moderna, or J&J.
We'll have to see if other studies corroborate the NYU finding, and vaccine stock investors should watch carefully. It's likely that other researchers will study J&J's performance against delta and additional variants in the coming months. If they draw the same conclusions, J&J may face a big challenge -- and Pfizer and Moderna, a big opportunity.