It's not news that Moderna (MRNA -0.47%) and Pfizer (PFE 0.40%) are the undisputed winners of the race to develop and commercialize a coronavirus vaccine. Pfizer expects to make around $32 billion this year from sales of Comirnaty, whereas Moderna expects roughly $19 billion from sales of Spikevax.
But those financial successes may prove short-lived if a competitor can invent a vaccine that's more convenient and more protective. In fact, candidates are already in the works which could shatter the duopoly's dominance. Here's why that matters for investors.
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It all boils down to efficacy
As great as the jabs from Pfizer and Moderna are at preventing severe disease, they falter when it comes to preventing people from falling ill and being able to infect others.
Whereas the shots have little problem with generating immunity in the lungs, generating immunity in the mouth and nose is harder. Given that the coronavirus infects people via the mouth and nose, a vaccination which could stimulate immunity in those locations would almost certainly be more effective at preventing infection as well as transmission.
And that's precisely what AstraZeneca (AZN 0.73%) is working on. Its intranasal formulation of the adenovirus-based vaccine it developed in conjunction with the University of Oxford is already being tested in a phase 1 clinical trial that's slated to conclude at the end of March. Corroborating reports from animal models suggest that the results will be favorable.
If the spray is eventually approved for sale, it'll likely indicate that an intranasal version of a previously approved vaccine can provide immunity explicitly where the injected format fails to do so. And it should shake up the entire market for coronavirus inoculations in the process.
Assuming that AstraZeneca's intranasal spray vaccine maintains the intramuscular jab's protectiveness against severe disease -- and it looks like it will -- it'll be the only product on the market that can prevent infection and transmission of the coronavirus that causes COVID.
That's a potential competitive advantage that would give the company a fighting chance at capturing a portion of the vaccine pie, which is quite large. Based on Pfizer and Moderna's sales estimates, mentioned earlier, the two businesses will bring in a combined $51 billion from sales of their shots.
In 2021, global sales of AstraZeneca's injectable vaccine were roughly $4 billion, which helped the company's top line to grow by an impressive 41%. Therefore, AstraZeneca would need to capture an even larger share of the market to increase its trailing-12-month revenue of $37.4 billion, assuming it retains its portion from 2021.
If its competitors fail to update their vaccines to provide transmission-halting capabilities similar to those the nasal spray appears to have, the company could be able to gain market share quite rapidly.
Wait for more data before investing
As good as AstraZeneca's intranasal spray project sounds, it's important to recognize that it could still fail in a later-stage clinical trial. Likewise, even if future trials show that the candidate is safe and effective, it'll take a while for the company to get the green light from regulators and manufacture enough doses to serve global demand in competition with Pfizer and Moderna, among others.
Plus, investors should note that it'll take a fairly large revenue impact to make AstraZeneca's large top line budge by very much.
So it makes sense to keep an eye out for any updates from the clinical trial to see how things are coming along. If the company's efforts pan out, it'll have the rights to sell what just might be a pandemic-ending product. Even if that doesn't make the stock outperform the market, it would definitely be an accomplishment worth applauding.
