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After COVID-19, Could This Be the Next Billion-Dollar Vaccine Market?

By Adria Cimino – Oct 4, 2021 at 6:00AM

Key Points

  • Moderna, Pfizer, and Sanofi have moved vaccine candidates into phase 1 studies for this particular market.
  • This respiratory virus kills at least 12,000 Americans every year.
  • The use of mRNA technology may allow companies to more quickly update vaccines when needed.

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Three healthcare giants are vying for the prize.

For vaccine leaders Moderna (MRNA 0.48%) and Pfizer (PFE -0.33%), the coronavirus vaccine market represents more than $50 billion this year. Moderna expects $20 billion in vaccine sales. And Pfizer and its partner BioNTech (BNTX 0.16%) will split profits after taking in $33.5 billion in vaccine revenue.

Those numbers sound tough to beat. But the companies don't necessarily have to top this performance. Instead, they may just use their expertise to enter a smaller market -- but one that still could offer sales in the billions. So, what's the next focus for Moderna, Pfizer, and rivals? Let's find out.

A healthcare worker smiles at a patient before administering a vaccine.

Image source: Getty Images.

Between 9 million and 45 million cases

First, a clue. This respiratory illness has affected between 9 million and 45 million Americans every year since 2010, according to the Centers for Disease Control and Prevention. That's a broad range -- because many people recover at home and don't report their illness. I'm talking about... seasonal flu. The CDC says flu has resulted in 12,000 to 61,000 deaths annually.

Today, French company Sanofi (SNY -1.88%) leads the flu vaccine market. Last year, the company reported $2.8 billion in flu vaccine sales -- an increase of 37% from the previous year. And Sanofi shipped more than 250 million doses.

Vaccines made from inactivated bits of the virus dominate the market. An example of this is Sanofi's Fluzone. Now, however, a new kid is in town. And that new kid's name is messenger RNA (mRNA).

Moderna and Pfizer are entering the mRNA flu vaccine game. They know the business well. That's because their coronavirus vaccines use mRNA.

And even Sanofi is exploring this new type of flu vaccine. In fact, Sanofi said last month that it's dropping its coronavirus mRNA vaccine candidate -- considering the supply of mRNA vaccines already on the market. Sanofi will focus on developing an mRNA candidate for flu. The company launched a phase 1 clinical trial in June.

Moderna recently said its phase 1/2 study of its seasonal flu vaccine candidate is fully enrolled. The investigational vaccine targets four strains of flu. And Pfizer last month dosed the first participants in a phase 1 study of its quadrivalent vaccine candidate for seasonal flu. Smaller players also are exploring this market. For instance, Arcturus Therapeutics has a candidate in preclinical studies.

Giving the body instructions

The magic of mRNA vaccines is they don't use inactivated or weakened virus to stimulate the immune system. Instead, mRNA gives the body instructions to produce copies of a key part of the virus. The body's cells then learn to recognize this intruder and mount an immune response to fight off infection.

By relying only on a genetic sequence -- and not virus itself -- researchers can more quickly produce vaccine candidates. And down the road, more quickly update them. As we've seen throughout the pandemic, this factor can be crucial.

So, the race is on. And these three vaccine giants have hit the ground running. But can each of them make it to the finish line and carve out a billion-dollar market here? First, it's important to say Moderna may have the advantage of mRNA expertise. The company's entire pipeline is based on this technology.

Pfizer, however, has built strength in the area through its partnership with BioNTech. But this comes with a price. If Pfizer's flu vaccine candidate reaches commercialization, it must pay BioNTech royalties.

Sanofi may be the straggler when it comes to mRNA technology. But the company's leadership in the overall flu vaccine market offers it a certain advantage. Governments and healthcare systems know and trust Sanofi's vaccines. This could translate into orders for any new vaccine Sanofi produces.

Revenue prospects

It's fair to say each of these companies has an element that could push it toward success in this race. Now, if all three of them make it to the finish line, let's consider revenue prospects.

The market for flu vaccines is growing. At a compound annual growth rate of more than 7%, it should reach $10.7 billion by 2028, a Fortune Business Insights report predicts. I mentioned Sanofi's current flu vaccine revenue earlier. And the company shares the market with at least six other major players, according to the Fortune Business Insights research.

But this isn't a matter of simply dividing the market up in equal parts. If mRNA technology proves it can beat more traditional vaccines, our three mRNA players may gobble up at least some of rivals' market share. So, stay tuned. An mRNA flu vaccine could become the next billion-dollar business for Moderna, Pfizer, and Sanofi.

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

Stocks Mentioned

Moderna Stock Quote
$182.35 (0.48%) $0.87
Pfizer Stock Quote
$50.91 (-0.33%) $0.17
Sanofi Stock Quote
$45.01 (-1.88%) $0.86
BioNTech Se Stock Quote
BioNTech Se
$169.74 (0.16%) $0.27
Arcturus Therapeutics Holdings Inc. Stock Quote
Arcturus Therapeutics Holdings Inc.
$19.10 (3.86%) $0.71

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

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