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Why Pfizer and Moderna Won't Make As Much Extra Money From U.S. Booster Doses As You Might Think

By Keith Speights – Aug 17, 2021 at 5:52AM

Key Points

  • The FDA and CDC have given a thumbs-up for third booster doses of mRNA vaccines in immunocompromised individuals, but this won't translate to a lot of extra revenue for Pfizer or Moderna.
  • There's a relatively small market in the U.S. for booster doses under the current EUAs.
  • The U.S. government has also already secured supply deals for more than enough doses to fully vaccinate every American and give a third booster dose.

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There are two simple reasons.

Boosters are coming. For a while, both the Centers for Disease Control & Prevention (CDC) and the U.S. Food and Drug Administration (FDA) played down the need for third COVID-19 booster doses. Both agencies have now changed their tune.

On Aug. 12, the FDA updated the Emergency Use Authorizations (EUAs) for the COVID-19 vaccines made by Pfizer (PFE 0.74%) along with its partner, BioNTech (BNTX -0.88%), and Moderna (MRNA -0.23%) to include a third booster dose for immunocompromised individuals. One day later, the CDC changed its stance to recommend booster doses of the two messenger RNA (mRNA) vaccines for moderately to severely immunocompromised individuals. 

With EUAs in hand for third booster doses, will the top COVID-19 vaccine makers rake in a lot more revenue now? Not really. Here's why Pfizer and Moderna won't make as much extra money from U.S. booster doses as you might think.

A healthcare professional preparing to give a shot to a person.

Image source: Getty Images.

A relatively small market 

One key reason why Pfizer and Moderna won't make much more money is the limited scope of the EUA expansions. The FDA said that the broader authorizations will permit booster doses for "solid organ transplant recipients or those who are diagnosed with conditions that are considered to have an equivalent level of immunocompromise."

Acting FDA Commissioner Janet Woodcock stated, "After a thorough review of the available data, the FDA determined that this small, vulnerable group may benefit from a third dose of the Pfizer-BioNTech or Moderna Vaccines." Her wording clearly indicates that the target group for booster doses isn't very large.

Just how big is the opportunity for Pfizer and Moderna? Around 3% of U.S. adults are moderately to severely immunocompromised, according to the CDC. That's around 8 million people.

Using the $24 per dose price for the Pfizer-BioNTech COVID-19 vaccine, this market is in the ballpark of $190 million. And it will be divided between Pfizer and Moderna. Pfizer expects its COVID-19 vaccine will generate $33.5 billion in sales this year. Moderna projects around $20 billion in sales for its vaccine. The U.S. booster dose market under the current expanded EUAs represents under 1% of those totals.

The deals are done

Even if the potential market size was significantly larger, Pfizer and Moderna still probably wouldn't increase their revenue much over the near term. Why? The U.S. government has already bought way more doses than it needs to fully vaccinate every American and still have plenty of doses remaining for boosters.

The U.S. has supply deals in place with Pfizer and Moderna for 500 million doses each. That's a total of 1 billion doses to vaccinate a country with roughly 333 million people. Every person in the U.S. could receive the standard two doses of the mRNA vaccines and receive a third booster shot.

Of course, the COVID-19 vaccines aren't authorized for everyone in the U.S. yet. So far, the FDA hasn't granted EUA for children under age 12. There are around 50 million kids in this group.

Remember, too, that the U.S. government has supply deals in place with other vaccine makers. Johnson & Johnson is committed to supplying 200 million doses of its single-shot vaccine. The U.S. stands to receive another 100 million doses from Novavax, which hopes to file for EUA in the fourth quarter of this year for its COVID-19 vaccine. 

Still some big opportunities

None of the mRNA vaccine stocks moved a lot higher because of the FDA and CDC announcements last week. There are still big opportunities for Pfizer and Moderna, though, related to booster shots.

For one thing, not every country has secured an excess of supply as the U.S. has. If these other nations authorize or approve booster doses for large groups (and not just immunocompromised individuals), Pfizer and Moderna could experience more significant sales growth.

These companies are also anticipating the need for regular booster doses for most people on at least an annual basis. Assuming this scenario unfolds, Pfizer and Moderna will each generate billions of dollars each year from their COVID-19 vaccines.

Keith Speights owns shares of Pfizer. The Motley Fool recommends Johnson & Johnson and Moderna Inc. The Motley Fool has a disclosure policy.

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Stocks Mentioned

Pfizer Stock Quote
Pfizer
PFE
$49.21 (0.74%) $0.36
Johnson & Johnson Stock Quote
Johnson & Johnson
JNJ
$177.24 (0.13%) $0.23
Novavax Stock Quote
Novavax
NVAX
$16.54 (-2.88%) $0.49
Moderna Inc. Stock Quote
Moderna Inc.
MRNA
$176.40 (-0.23%) $0.41
BioNTech SE Stock Quote
BioNTech SE
BNTX
$154.85 (-0.88%) $-1.38

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