Is four times the charm? Pfizer (PFE 0.55%) CEO Albert Bourla has been talking up the need for a fourth dose of his company's COVID-19 vaccine in several TV interviews.
Bourla told CNBC on Friday that another dose is needed because of the coronavirus omicron variant. He said that Pfizer plans to soon submit data to the U.S. Food and Drug Administration (FDA) on a fourth dose of COVID-19 vaccine Comirnaty. And Bourla stated on the CBS news show Face the Nation on Sunday that a fourth booster is necessary.
It remains to be seen if regulatory agencies will agree with this view. However, there's a real possibility that yet another booster dose could be on the way for Americans. If so, how much money would Pfizer make?
Image source: Getty Images.
Crunching the numbers
So far, more than 124 million Americans have been fully vaccinated with Comirnaty. If we multiplied that number by $19.50, the price per dose Pfizer has charged the U.S. government in the past, the total comes to more than $2.4 billion.
However, the picture is more complicated than that simple calculation. For one thing, not every American who is fully vaccinated with the Pfizer vaccine has received a third booster dose. Instead of 124 million, that number is only around 53 million. If we assume that only those who have gotten a booster would elect to get a fourth dose of Comirnaty, the sales total would be a little over $1 billion.
So can we go with $1 billion or so for Pfizer with a fourth dose? Not so fast. The company records all of the revenue from Comirnaty but splits profits equally with its partner, BioNTech (BNTX 0.58%).
But there's also an even more important consideration. The U.S. government has already ordered 600 million doses but has only administered slightly over 328.6 million doses of Comirnaty.
That means another 270 million doses or so of Pfizer's vaccine could be administered to Americans before the U.S. would need additional doses. Everyone who has already received Comirnaty could get a fourth dose without exhausting current supply commitments that Pfizer has made to the U.S. From this standpoint, Pfizer really won't make any additional sales in the U.S. if a fourth dose is authorized.
Keep counting
Does this mean that winning U.S. authorization or approval for a fourth dose isn't important to Pfizer? Not at all.
The company will only receive additional orders for its vaccine from the U.S. government if COVID-19 remains a significant threat. And if the FDA authorizes a fourth dose of Comirnaty, that would be a clear sign that the coronavirus threat hasn't gone away.
Also, Pfizer is counting on the need for further doses beyond a fourth dose. Bourla said on Face the Nation that the company is working on a version of its vaccine that will provide protection against all coronavirus variants and provide protection for at least one year. Pfizer expects that annual boosters will likely be required on an ongoing basis.
Of course, the U.S. isn't Pfizer's only market. If annual COVID-19 vaccine doses are needed for Americans, they'll also be needed throughout the world.
More to consider
If Pfizer receives U.S. authorization of a fourth dose of Comirnaty, it would also bode well for the future sales of the company's COVID-19 pill, Paxlovid. Pfizer is already planning to make 120 million doses of Paxlovid this year and generate sales of at least $22 billion from the oral therapy.
For investors, the most important consideration is what this all means for Pfizer's share price. The big pharma stock currently trades at only 7.4 times expected earnings. This low valuation reflects expectations of significantly lower COVID-19-related sales after 2022. The need for a fourth dose followed by the potential for annual boosters afterward could result in upward revisions to revenue and earnings estimates.
Four times might not be the charm for Pfizer. And the company and its shareholders will probably be happy campers if so.
