In 2021, the COVID-19 vaccine marketed by Pfizer (PFE -2.80%) was one of the leaders in this new but highly lucrative market. While the final tally is still unknown, the drugmaker said it expected to generate $36 billion in sales from Comirnaty in 2021. That's not bad at all for a first year on the market.
But Pfizer's coronavirus-related efforts didn't stop there. In December, the company earned Emergency Use Authorization (EUA) from the U.S. Food and Drug Administration (FDA) for an oral COVID-19 therapy called Paxlovid. And while there is plenty of competition in the coronavirus treatment market, a recent regulatory decision from the FDA bodes well for Paxlovid's prospects.
The FDA deals a blow to these leading drugmakers
One reason the COVID-19 pandemic still isn't in the rearview mirror is that the virus that causes the disease keeps mutating, and some of its newer variants are much more contagious than the original one. The omicron variant of the virus that arose late last year now accounts for the overwhelming majority of new cases of COVID-19 in the U.S. Unfortunately, some existing treatments seem less effective against it.
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That's why the FDA recently chose to revise the EUA it had awarded to a couple of COVID-19 therapies. Specifically, two monoclonal antibodies for treating COVID-19 -- REGEN-COV, marketed by Regeneron Pharmaceuticals, and the duo of bamlanivimab and etesevimab, owned by Eli Lilly -- will now only be used with cases of COVID-19 in patients who were likely exposed to a variant of the virus against which these treatments can be effective.
In other words -- and as the agency explicitly says -- these therapies are unlikely to be effective against omicron. REGEN-COV generated $3.5 billion in net sales in the U.S. alone in the first nine months of 2021, accounting for about 31.7% of the Regeneron's total revenue. Eli Lilly was less reliant on its COVID-19 lineup, but it still brought in $1.2 billion for the company through Sept. 30, 2021, accounting for 5.8% of its revenue.
Looking at these numbers, it is clear that the FDA's recent regulatory decision is bad news for Eli Lilly and even worse news for Regeneron. But what does it mean for Pfizer?
Another growth driver for Pfizer
In November, Pfizer agreed to deliver 10 million treatment courses of Paxlovid to the U.S. government for $5.29 billion. The company later penned another deal for an additional 10 million courses, not to mention an agreement with the U.K. government for 2.5 million courses of Paxlovid. That was before the FDA decided to modify the EUA granted to Regeneron's and Eli Lilly's coronavirus therapies.
Of course, there are still other competitors on the market. For instance, Gilead Sciences' Veklury has been in use since 2020 and continues to play an important role in the fight against COVID-19. There's also molnupiravir, which is marketed by Merck -- among others. But it's worth noting that Paxlovid's efficacy seems to compare favorably to that of molnupiravir. In a clinical trial, molnupiravir reduced the risk of hospitalization or death in COVID-19 patients by 30%.
By comparison, Paxlovid reduced the risk of hospitalization or death by a much more impressive 89% in a study. Since it is now facing less competition in the U.S., not to mention the fact that it seems more effective than at least one other authorized COVID-19 therapy, Paxlovid could become one of the leading coronavirus drugs on the market.
Pfizer remains attractive
Pfizer could generate more than $39 billion in sales from its coronavirus lineup (including both Paxlovid and Comirnaty) this year, which would exceed what it said it would rack up from Comirnaty last year. The company also boasts an impressive lineup thanks to products such as anticoagulant Eliquis, cancer medicines Xtandi and Inlyta, and a biosimilars segment with rapidly growing sales.
And with the cash it generated thanks to its coronavirus effort -- the company ended the third quarter with $29.2 billion in free cash flow -- the drugmaker can shop around for new and exciting pipeline programs to ensure its future. That's why Pfizer remains one of the more attractive options in the pharma industry, especially after it dropped along with the broader market recently.
