Please ensure Javascript is enabled for purposes of website accessibility

Moderna's President Just Gave Us a Clue About the Size of Tomorrow's Vaccine Market

By Adria Cimino – Nov 7, 2021 at 6:00AM

Key Points

  • Experts say the coronavirus pandemic may shift to an endemic situation next year.
  • That means the virus still will be around -- and people will need protection.
  • Moderna is working on a product candidate that could persuade a big part of the population to get an annual booster.

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

It's all about boosters.

Coronavirus vaccine makers are generating billions of dollars in revenue. In fact, leaders Pfizer and Moderna (MRNA 1.18%) may bring in $54 billion combined this year. In their earnings reports, both also gave us a glimpse of what to expect in 2022. Pfizer predicts about $29 billion and Moderna predicts at least $17 billion. This is according to advance purchase orders. So, the numbers could easily move higher.

Still, it's not yet clear what the coronavirus market will truly look like post pandemic. But in Moderna's earnings report, the company may have offered us an important clue. Let's take a look at what Moderna President Stephen Hoge said -- and what it might mean for the company's revenue.

A masked and gloved healthcare worker prepares a syringe for vaccination.

Image source: Getty Images.

From pandemic to endemic

First, it's important to note that experts predict the coronavirus will stick around. Once the pandemic is over, the virus will become endemic, a lot like the flu. It will always be present -- but it may flare up at different times. So, it's unlikely coronavirus vaccine sales will evaporate. People still will need protection.

Moderna echoed what other experts have said. That shift from pandemic to endemic likely will start next year. And here comes Hoge's prediction.

Hoge says the COVID-19 market of the future will be a booster market. And it will be "targeted at those populations that are (at) higher risk of respiratory disease," he said during the third-quarter earnings call. "Those populations tend to be older adults and immunocompromised."

About 700 million people in the world are 65 or older, according to the United Nations. It's unclear how many people may be immunocompromised globally. But about 10 million Americans fall into that category, a Bulletin of the Atomic Scientists report showed.

So, this is a lot less than the world population of 7.9 billion. Should we be worried? Not necessarily. We should look at seniors and the immunocompromised as a core group that surely will go for an annual jab. They are the ones most in need of protection. And this ensures vaccine sales won't drop off a cliff after the pandemic.

A combination vaccine

This doesn't mean no one else will go for a booster. In fact, Moderna is working on one potential product that could push the masses to go for a shot. The company is developing a combination flu/coronavirus/allergies vaccine. Moderna currently is studying the flu/coronavirus candidate in preclinical tests. But during its earnings call, the company said the goal is to add allergy to the mix.

By packaging the coronavirus vaccine with an allergy vaccine, Moderna is sure to increase its target audience down the road. As much as 30% of the world's population suffers from seasonal allergies, according to the American Academy of Allergy, Asthma, & Immunology.

Now what does all of this represent in terms of future revenue? Even as the pandemic winds down, governments will want to order enough booster doses to protect their populations. So, I don't expect an immediate decline in orders or revenue.

Two key factors

Into the future, two factors will determine what happens with revenue. First, pricing. If Moderna doesn't raise its prices, revenue could decline. After all, people eventually would need only one dose annually instead of two or more. But if Moderna lifts its prices, revenue could stabilize or even move higher. Another factor will be whether many people actually go out and get their booster shots. This will determine whether governments then order more doses or not.

So, at this point, it's too early to predict booster revenue down the road. But that shouldn't be too disturbing for investors who believe in Moderna's long-term story. Even if coronavirus booster revenue eventually wanes. Moderna has 37 programs in the pipeline based on the same technology as its blockbuster coronavirus vaccine. If even a few succeed, Moderna and its investors will reap the rewards well into the future.

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

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.