Modern (NASDAQ: MRNA) and Pfizer (NYSE: PFE) made history when they brought their coronavirus vaccines of development to market in less than a year. So far, Moderna has been the only one to benefit from a share price perspective. The company’s shares have risen more than 600% this year. Pfizer’s inventory has changed little.
Why such a difference? Investors knew that an ultimate vaccine would be Moderna’s first marketing product, and therefore the source of product revenue. Conversely, the future of Pfizer did not depend on the vaccination program. This is because the large pharmaceutical company earns revenue from a wide variety of products.
Now we have entered a new phase. Moderna and Pfizer launched their vaccines this month under emergency permits. Let’s see which company can win when it comes to earnings and performance in equities.
British, American and European authorizations
Pfizer and size BioNTech authorization in the United Kingdom, then in the United States, and recently in the European Union. The pharmaceutical company has orders for at least 550 million doses from various countries and regions, including the US, the European Union, the United Kingdom and others. The number does not include Canada, which ordered doses but not how many announced.
Pfizer has not disclosed how much it is asking, but we can use the price the US is paying as a guideline. That’s $ 1.95 billion for 100 million doses, or $ 19.50 per dose. For the doses ordered so far, it is more than $ 10 billion. Pfizer must also share some of its profits with BioNTech.
Let’s look at Modern. The US Food and Drug Administration (FDA) granted Moderna’s emergency permit last week. The biotechnology has received orders for more than 470 million doses from the US, the European Union, Canada, Switzerland and other countries. Like my Pfizer score, it does not include countries that did not order the quantity. In this case, it means Singapore and Qatar.
We’ll use the price the US paid again to give us an estimate of revenue, and that’s $ 1.5 billion for $ 100 million doses – or $ 15 per dose. That means more than $ 7 billion in revenue from the doses ordered so far. One point to keep in mind is that Moderna has priced smaller orders from $ 32 to $ 37 per dose, so revenue could be even higher.
There are a few other points to consider. First, it is clear that the companies will not generate that revenue overnight. Moderna aims to make up to 125 million doses available in the first quarter. In the short term, revenue could be just under $ 2 billion.
Pfizer said it could deliver as many as 50 million doses and 1.3 billion doses by the end of next year. It could raise about $ 975 million by the end of this year.
Both Moderna and Pfizer are still pushing to quickly reach the $ 1 billion revenue level in sales of their coronavirus vaccines. And that’s important.
From an income perspective, without considering other factors, the companies can be equal. But a logistical factor is also part of the picture. I am referring to transportation and storage. In this area, Moderna scores more points.
The Moderna vaccine can be transported and stored at standard refrigerator temperatures. It can even be left for up to 12 hours at room temperature. Pfizer needs ultra-low temperatures, so countries and healthcare systems that want to supply Pfizer’s vaccine should invest in special freezers.
The cost of freezers ranges from $ 5,000 to $ 15,000. This significantly increases the overall budget for vaccination. And Stat News reports that Pfizer’s minimum order requirement is higher than that of Moderna – 975 doses versus 100 doses. The temperature and minimum order factors will make it difficult or impossible for many small healthcare institutions to consider the Pfizer vaccine.
What does this mean for the companies and their investors?
In the first few weeks of vaccine introduction, the world needs all the vaccine. As you can see from the numbers above, both companies do not immediately have the production capacity to fulfill all orders. Although Pfizer’s vaccine is a logistical challenge, countries and healthcare institutions will do their best to adapt.
But once initial orders are filled and both companies reach full production, Moderna is likely to emerge as a leader. Transport and storage requirements mean that Pfizer’s vaccine will cost countries far more than just the price of doses. Governments will take this into account when deciding to place their next orders.
In terms of share price, Moderna also has the most to gain. Investors will closely monitor the revenue of this first and only product in the coming quarters. If it meets or meets expectations, the shares of this biotechnology company are possibly on their way to another winning year.