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How Bad Is This News for Moderna?

By Adria Cimino – Nov 3, 2021 at 10:00AM

Key Points

  • Rival Pfizer already is vaccinating teens and kids.
  • Regulatory authorities recently told Moderna they need more time to review its request for authorization in teens.
  • In the best case, Moderna may enter the teen market eight months behind Pfizer.

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Moderna has fallen behind in the teen and kids vaccine market.

Moderna (MRNA -2.01%) and rival Pfizer (PFE -1.04%) dominate the coronavirus vaccine market. Here, I'm talking about vaccination for adults. But they're both vying for an additional market: the opportunity to vaccinate teens and kids.

Pfizer won authorization in the teen market in May. And the U.S. Food and Drug Administration (FDA) offered Pfizer authorization in kids ages 5 through 11 late last month. Moderna, however, has hit a stumbling block. The FDA says it needs more time to review the company's data in teens. And because of this, Moderna is delaying its regulatory request for use in kids. So, now you might be wondering: How bad is this news for Moderna? Let's find out.

A healthcare worker prepares to vaccinate a teenager.

Image source: Getty Images.

Heart inflammation risk

First, let's talk about the reason behind this delay. For a while, health authorities have been investigating a risk of heart inflammation following vaccination with mRNA vaccines -- so this refers to both the Moderna and the Pfizer vaccines.

However, recent international analyses have put the focus on Moderna. The FDA said it must study those analyses before deciding on the Moderna vaccine for teens. The agency also said its review may extend into January.

Considering the situation, Moderna said it wouldn't request authorization for its vaccine in kids ages 6 through 11 until the FDA completes this review. The company didn't say why it made that decision. But it's logical to make this assumption: Any information from the teen review could be helpful for Moderna as it prepares a submission for a younger age group.

So, Pfizer has been vaccinating teens for about six months. And it's getting started on vaccinating kids right now. The very best scenario for Moderna would be entry into the teen market in January -- and entry into the kids market in the first quarter of 2022. But even that leaves Moderna far behind Pfizer in those age groups.

What does this mean for revenue?

There are about 54 million kids in the U.S. between the ages of 5 and 17, according to Kids Count data. Moderna's vaccine is given in two doses. This means we need about 108 million vaccine doses to vaccinate everyone in this age group. I'll use the price of $16.50 that Moderna charged the U.S. in a recent order. And that gives us the figure of nearly $1.8 billion in potential revenue.

There are a couple of things to keep in mind, though. First, even if Moderna entered the market at the same time as Pfizer, it's unlikely the company would vaccinate every child in the U.S. That's because it would share the market with its larger rival -- as it does in the adult vaccine market. And some parents won't vaccinate their children. This limits the market for both vaccine makers.

So, revenue potential probably is lower than what I calculated above. Of course, I'm just referring to the U.S. right now. Pfizer and Moderna could generate revenue in younger age groups internationally, too.

And the second thing to keep in mind is this: The delay for Moderna won't immediately impact orders. Countries have already completed orders for this year. And some have even signed advance purchase agreements with the company all the way out to 2024. So, this won't limit revenue in the months to come.

Here's the risk

The one risk is this: Pfizer may become the preferred vaccine for kids just because it got to the finish line first. If doctors and parents are happy with the vaccine, they may prefer to stick with it.

That isn't the best news for Moderna. But it isn't disastrous either. The company has vaccinated 70 million Americans -- and now has the task of offering many of them a booster. Moderna also is working on strain-specific booster candidates and even a next-generation coronavirus vaccine candidate. So, there are plenty of opportunities for revenue ahead in the coronavirus space. And that's why I wouldn't worry about the company's revenue prospects -- even if Pfizer wins in the youth market.

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

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