Americans received more than 120 million doses of COVID-19. Another 2.4 million shots are fired every day. Within the next few months, every adult in the U.S. who wants to be vaccinated will be.
But there is a big unanswered question affecting everyone who receives a COVID-19 vaccine: How long will the vaccines provide protection against new coronavirus infection? It’s not like the old video game show The $ 64,000 demandhowever. How long COVID-19 vaccines last is a million dollar question.
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Billions of dollars on the line
Pfizer (NYSE: PFE) and BioNTech (NASDAQ: BNTX) was the first to win US Emergency Permits (EUA) for their COVID-19 vaccine, BNT162b2. In February, Pfizer estimated that the vaccine would generate sales of about $ 15 billion this year, based on the supply at the time.
Since then, however, the two companies have received additional orders for BNT162b2 – another 100 million doses for the US and 200 million extra doses for the European Union. These transactions should increase BNT162b2 sales to more than $ 20 billion in 2021.
Modern (NASDAQ: MRNA) won EUA for its COVID-19 vaccine, mRNA-1273, shortly after Pfizer and BioNTech. The biotechnology expects to generate $ 18.4 billion in sales from the vaccine this year.
Johnson & Johnson (NYSE: JNJ) EUA insures for its single dose of COVID-19 vaccine at the end of February. The health giant is selling the vaccine at cost price during the pandemic for about $ 10 per dose. J&J hopes to deliver at least 1 billion doses of its vaccine this year. Assuming it achieves that goal, the company will earn about $ 10 billion in sales.
These three vaccines alone could earn more than $ 48 billion this year. And we did not include sales for COVID-19 vaccines AstraZeneca (NASDAQ: AZN) and Novavax (NASDAQ: NVAX), which could both win US EUA in the near future.
The best guess at the moment
No one knows for sure how much of the huge revenue these companies will make in 2021. In theory, COVID-19 vaccines can be protected against infection for many years. In that case, sales of vaccines will decline by 2022.
Let us assume, on the other hand, that the booster dose is necessary every six months. The scenario would mean that Pfizer, Moderna and the other companies could count on significant revenue annually.
The problem lies with our original question. We do not yet know how long the immunity offered by COVID-19 vaccines will last. There is a good reason for the mystery: not enough time has passed since the first participants in clinical trials were fully immunized.
New variants can also be critical. Although current COVID-19 vaccines provide long-term protection against existing coronavirus strains, the emergence of new viral variants may require more frequency shots.
The best guess at the moment is probably to deal with Moderna CEO Stephane Bancel’s prediction that COVID-19 will be like the seasonal flu. If he is right, annual vaccinations are needed.
Potential winners and losers
A recurring COVID-19 vaccine market could be quite different from what we see in 2021. Governments around the world are currently trying to get hold of any vaccine that is powerful or likely to get it. But going forward, other factors may be important.
As the supply of vaccines becomes large enough to meet the demand, the price will become a bigger problem. This may benefit Johnson and Johnson, as the vaccine requires only one dose. However, Moderna is evaluating a next-generation COVID-19 vaccine that may also be given as a single dose. Do not be surprised if Pfizer and Novavax, both two-dose vaccines are very effective, continue to test single-dose doses.
Perhaps the most important distinction in the future, however, is how quickly companies can develop safe and effective vaccines targeted at new coronavirus variants. This could give Pfizer / BioNTech and Moderna the advantage. Their messenger RNA technologies enable rapid vaccine development.
AstraZeneca and Johnson & Johnson may be disadvantaged due to their adenovirus delivery methods. It is possible that individuals may develop immune resistance to the adenoviruses used.
In general, the biggest winners, if shots are needed regularly, will be the relatively smaller biotechnology stocks instead of the large pharmaceutical stocks. BioNTech, Moderna and Novavax will feel the impact of strong recurring revenue from COVID-19 vaccine sales more than AstraZeneca, J&J and Pfizer would do. However, if it turns out that COVID-19 is not similar to the seasonal flu, these biotechnology stocks are likely to be the biggest losers.
When will we know the answer to the multimillion-dollar question that threatens all these drugmakers? Probably by the fourth term we will at least have a good idea if the annual booster dose is needed. This is when participants in the late stage studies conducted by Pfizer / BioNTech and Moderna will be vaccinated for at least one year.
This article represents the opinion of the author, who may not be in agreement with the ‘official’ recommendation position of a Motley Fool premium advisory service. We are furry! When we question an investment thesis – even one of our own – it helps us all to think critically about investing and to make decisions that help us become smarter, happier and richer.