Vaccinating the world against the coronavirus is a lucrative business, and the shifting winds of the pandemic have big implications for the competitive landscape of vaccine makers. In the U.S., the delta variant accounts for 83% of new cases. By all indications, it's fiercer and more difficult to protect against than prior variants and the original SARS-CoV-2 virus.

That means there's more pressure than ever for vaccines to do their jobs well. But rather than disrupting the emerging status quo of the vaccine market, it looks like the delta variant is going to intensify the trends of consolidation that already exist.

A doctor protected by a face shield prepares a vaccination for a patient.

Image source: Getty Images.

Why the delta variant matters

The principal reason why the vaccine landscape is changing is that some of the products on the market seem to be more effective against the delta variant than others. The two-dose jabs made by Moderna (MRNA -3.53%) and Pfizer (PFE 1.22%) remain the gold standard for generating durable immunity against the coronavirus. 

But against the delta variant, both are likely to struggle. Preliminary data from the Israeli Ministry of Health suggests that Pfizer's vaccine could be only 39% effective at preventing symptomatic infections from the variant, though it remains 91% effective against the risk of severe illness. Though there isn't any high-quality data describing the efficacy of Moderna's offering at the population level, the company's initial data indicates that there is likely a similar reduction in protectiveness.

If that sounds like bad news for Pfizer and Moderna shareholders, it isn't. The vaccines made by Johnson & Johnson (JNJ -0.22%) and AstraZeneca (AZN -0.56%) appear to perform even worse against the variant. In fact, they're suspected of performing so much worse that public health officials in places like Italy are allowing certain people who have received jabs of these two vaccines to get booster shots of Pfizer or Moderna. This hodgepodge vaccination solution is supported by a growing body of evidence, and it's bad news for AstraZeneca as well as Johnson & Johnson.

Because these two vaccines don't perform as well against the delta variant, it's hard to see high demand for them among the developed countries that can afford to be picky. And because it doesn't look like its offering is effective enough when used in its standard two-dose regimen, there's a good chance that AstraZeneca specifically will miss out on future income from sales of booster shots. In contrast, Moderna and Pfizer will probably see rising demand for their doses, thereby stealing market share directly from the competition.

If global public health officials endorse the need for booster doses, as many expect them to (eventually) do, it's unlikely that either Johnson & Johnson or AstraZeneca investors will see much gain. On the other hand, such a ruling would probably juice the stock of the two mRNA vaccine makers even more.

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Will updated jabs make a difference to shareholders?

Pfizer, AstraZeneca, and Johnson & Johnson all have a vast portfolio of medicines, and coronavirus vaccine revenue is only a small part of their overall value proposition to shareholders. Still, these companies are working to make their jabs as competitive as possible in anticipation of selling boosters in the near future.

AstraZeneca is currently working on a new version of its vaccine intended to protect against the beta variant, to be used either as a booster shot or as a full course of two jabs for unvaccinated people. The project is currently in late-stage clinical trials, but it appears doomed to be out of date by the time it gets approved for sale. 

Pfizer will likely have more success with its effort to design a booster, as it's targeting the delta variant specifically. But it might not start clinical trials until August, so it could still miss the window for its new vaccine to be relevant depending on how the pandemic proceeds. Either way, its product will continue to be in demand.

Nonetheless, when it comes to the value of coronavirus vaccine maker stocks, Moderna has been the largest winner by a mile, and the delta variant surge seems to be increasing that trend. Given that nearly all of its revenue is derived from sales of its vaccine, it's hard to see how that could change. And if its early-stage booster shot project goes as planned, it might just be getting started.