Pfizer (PFE 1.42%) and Moderna (MRNA +11.64%) have one big thing in common. Both companies have dominated the coronavirus vaccine market -- and aim to continue generating blockbuster revenue from their vaccines in a post-pandemic world. Besides that program, though, the companies are very different.
Pfizer is a big pharmaceutical player with many blockbusters on the market. Moderna is a dynamic young biotech with a full pipeline of candidates, built on its game-changing messenger RNA technology. But Moderna's only commercialized product at the moment is its coronavirus vaccine/booster. Both stocks have slipped more than 20% so far this year. Which is the better buy now? Let's find out.
The case for Pfizer
We'll talk about the bad news first. Pfizer is facing declines in coronavirus vaccine revenue as demand falls. And it's facing declines in revenue from some of its older blockbusters as they lose exclusivity. But the good news is this shouldn't hurt Pfizer's long-term growth.
The big pharma player says it still expects to generate multi-billion-dollar revenue from its coronavirus vaccine and treatment "for the foreseeable future." The company plans on increasing its vaccine price to as much as $130 from about $30. And Pfizer expects to benefit from a market much like that of the flu, with people going for annual boosters.
NYSE: PFE
Key Data Points
Pfizer is expertly managing the upcoming losses of exclusivity on products such as its blood thinner, Eliquis. That's thanks to Pfizer's focus on research and development and the company's recent appetite for business deals. Pfizer today expects to launch 19 new products within an 18-month period. That's a record for the company.
The potential patent losses may result in $17 billion in lost revenue from 2025 through 2030 -- but newer products coming to market and others gained through acquisitions should add $45 billion to 2030 revenue, Pfizer predicts.
All of this means the big pharma company may be heading for a whole new era of growth -- and shareholders are likely to benefit.
The case for Moderna
Like Pfizer, Moderna also expects a slowdown in vaccine revenue this year. The biotech last year generated $18.4 billion in product sales. By comparison, this year, it's signed contracts for the delivery of $5 billion in doses.
But even if vaccine sales aren't as high as in early pandemic days, they're likely to continue at significant levels over time. Moderna, too, predicts the market will follow that of the flu vaccine market.
Meanwhile, Moderna is advancing other pipeline programs -- and it's on its way to becoming a multi-product company. The biotech has three candidates in phase 3 trials. These investigational vaccines for flu, respiratory syncytial virus (RSV), and cytomegalovirus (CMV) each represent a billion-dollar opportunity.
NASDAQ: MRNA
Key Data Points
Moderna aims to request regulatory approval for the RSV candidate in the first half of this year, so a launch could be right around the corner. The other two late-stage candidates could follow over the next few years. The biotech also is investing in cutting edge technologies like artificial intelligence to improve its processes and is expanding its offices and workforce. It's clear Moderna believes in its future.
Today, some investors worry about Moderna's dependence on the coronavirus vaccine. Revenue from multiple sources should make Moderna less of a risky bet -- so as Moderna gets closer to the finish line with its candidates, the shares may take off.
Big pharma or innovative biotech?
Should you buy Pfizer or Moderna right now? Both companies probably will continue to benefit from their coronavirus vaccine programs. And they both are taking the measures needed to drive growth down the road.
They also have seen their shares fall in recent times. Investors could get in on each company at a reasonable level.
Both of these healthcare stocks represent solid buys today -- but the better buy for you depends on your investment strategy and comfort with risk. If you're looking for a high-growth player, you should opt for Moderna. As we saw from share performance during the early days of the vaccine race, biotech often makes bigger share price moves than big pharma.
And it's easier for a smaller company, like Moderna with a market cap of $53 billion, to grow significantly than a bigger player like Pfizer -- with a market value of $224 billion.
If you're looking for more stability, though, and even some dividend growth, Pfizer is the better stock to add to your portfolio right now.
