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3 Reasons Why Pfizer's and Moderna's Vaccine Revenue Growth Is Just Getting Started

By Adria Cimino – Aug 3, 2021 at 8:38AM

Key Points

  • Pfizer’s and Moderna’s safety and efficacy profiles give them an advantage over rivals.
  • One potential audience may not boost orders and revenue today -- but may do so in a major way down the road.

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These elements may represent billions of dollars in the months and years to come.

Pfizer (PFE -0.12%) is expecting its coronavirus vaccine to generate a whopping $33.5 billion in revenue this year. Rival Moderna (MRNA -3.98%) is likely to offer an update on its vaccine during its quarterly earnings report on Thursday. During the last report, Moderna said advance purchase agreements for the year represented more than $19 billion in product sales.

Considering we're in the middle of a pandemic, some may wonder if sales are peaking -- and if they may decline once the health crisis eases. But it looks like Pfizer's and Moderna's coronavirus vaccine sales will do just the opposite. Let's take a look at three reasons why vaccine sales at both companies are set to grow well into the future.

A healthcare worker vaccinates a person.

Image source: Getty Images.

1. Pricing power

Pfizer and Moderna both increased vaccine prices in their latest contracts with the European Union, according to The Financial Times. The newspaper says Pfizer's price now is 19.50 euros ($23.18) instead of 15.50 euros ($18.42). Moderna's is $25.50, up from $22.60.

Pfizer's latest order from the European Union includes delivery of as many as 1.8 billion doses. At the new price, that represents more than $41 billion. At the old price, the order would have come to $33 billion.

Moderna in late June said the European Union ordered an additional 150 million doses to be delivered next year. If the higher price applies to that order, Moderna may generate $3.8 billion instead of $3.4 billion.

Pfizer's and Moderna's vaccines' efficacy levels are higher than rivals AstraZeneca and Johnson & Johnson. Also, the companies haven't faced any major safety problems. Some European countries turned away from the AstraZeneca and J&J products -- or recommended them only to certain age groups -- after they were linked to blood clots. These efficacy and safety advantages equal pricing power for Pfizer and Moderna.

2. Boosters on the way

Pfizer plans to submit its booster candidate -- a third dose of its authorized vaccine -- for Emergency Use Authorization this month. Moderna has said it plans to have a booster ready in the fall. Health officials in the U.S. haven't yet signaled it's time for a booster. In fact, earlier last month, they said just the opposite. The U.S. Food and Drug Administration and the Centers for Disease Control and Prevention said everyone fully vaccinated with an authorized vaccine is protected from severe illness.

But as the delta variant gains ground and cases rise, it's clear a booster eventually will be necessary. And that means more revenue for Pfizer and Moderna down the road. With every person needing a total of three doses instead of two, orders are likely to expand. Countries already are planning ahead. For instance, Taiwan recently placed an order for Moderna vaccine doses and doses of its variant-specific candidate (based on regulatory authorization).

So, more revenue is on the horizon for Pfizer and Moderna -- whether boosters are authorized and recommended right away or in several months.

3. Vaccines for kids

Pfizer already is vaccinating U.S. teens. And Moderna may be next. The company filed for authorization in the 12 through 17 age group and is waiting to hear from the FDA. Both companies also are studying their vaccines in children.

The FDA has asked Pfizer and Moderna to increase the number of children in their trials, according to a report in The New York Times. That's to more closely study heart inflammation risk. Some teens and young adults developed heart inflammation following vaccination.

It's not clear if the expansion of those trials will add weeks or months to the timetable. Moderna reiterated it expects to request authorization in this age group at the end of this year or in early 2022, according to the Times report. And Pfizer said last week that it should have data from the 5- to 11-year-old group ready to submit to regulators by September. Data for the youngest children will take a bit longer.

It will take time to roll out vaccines to children and get parents on board. And that's exactly why this component won't be a revenue driver right now -- but it may become a significant one next year and beyond. More than 73 million Americans are younger than 18, Kids Count data shows. If even half of them receive a two-dose vaccine, that represents more than $1.1 billion in product sales for Pfizer or Moderna (using the $15.25 price per dose the U.S. originally paid for Moderna doses.)

Pfizer and Moderna both are reporting billions in coronavirus vaccine revenue this year. But this isn't likely to be a one-time event. The points mentioned here are set to keep revenue growing during the pandemic and well into the future.

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

Stocks Mentioned

Moderna Stock Quote
Moderna
MRNA
$177.35 (-3.98%) $-7.35
Pfizer Stock Quote
Pfizer
PFE
$51.72 (-0.12%) $0.06
Johnson & Johnson Stock Quote
Johnson & Johnson
JNJ
$175.74 (-0.82%) $-1.46
AstraZeneca Stock Quote
AstraZeneca
AZN
$11,354.00 (0.34%) $38.00

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

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