Pfizer (NYSE: PFE) made one of the smartest decisions in the company’s long history earlier this year. It chose to collaborate with German biotechnology BioNTech (NASDAQ: BNTX) on the development and commercialization of the COVID-19 vaccine. And the rest, as they say, is history.
The companies’ BNT162b2 COVID-19 vaccine became the first to win US, UK and Canadian emergency use authorization (EUA). They have set up deals to deliver hundreds of millions of doses by 2021.
Just about everything has gone right so far, but that may not always be the case. Billions of dollars could depend on Pfizer’s next big COVID vaccine move.
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Cold, hard facts
Pfizer has a problem. BNT162b2 requires ultra-cold storage. How cold is ultra cold? The vaccine should be stored at 94 ° F for an extended period of time. It’s much colder than winter in Antarctica, and far below what conventional freezers can handle.
Sure, Pfizer and BioNTech have developed a special delivery that uses dry ice to maintain the ultra-cold temperature. However, some states prefer to use it Modernsay (NASDAQ: MRNA) mRNA-1273 COVID-19 vaccine in rural areas. Although mRNA-1273 messenger uses RNA technology such as BNT162b2, Moderna has created a formulation that can be stored in standard freezers.
However, Pfizer’s problem is not too important at this point. Rich countries continue to buy BNT162b2, including the US government’s recent purchase of another 100 million doses. After all, there are only two coronavirus vaccines on the market. And Pfizer’s price is more attractive than that of Moderna.
But the dynamics could change dramatically if other COVID-19 vaccines receive EUA. The logistical challenges associated with BNT162b2 could cause rich countries to switch to Pfizer’s competitors. Poorer countries can completely eliminate the vaccination of Pfizer and BioNTech.
A freeze-dried fortune
Pfizer could potentially drop a fortune if the ultra-cold storage requirements for BNT162b2 are a significant competitive disadvantage. A move of less than 100 million doses sold to another competitor would mean more than $ 2 billion in sales for Pfizer and BioNTech.
The good news is that Pfizer does not intend to make the storage requirements for its COVID-19 vaccine a roadblock. The big drug manufacturer and its German partner are working hard to solve a solution to the problem of storing ultra-cold.
In November, Pfizer Scientific Director Mikael Dolsten said in an interview with Business Insider that a lyophilized (lyophilized) version of BNT162b2 is being developed. This second version of the vaccine will be in powder form. And it does not need to freeze at all – just standard cooling.
Dolsten said the lyophilized powder version of BNT162b2 would be available sometime in 2021. If he got it right, it would have to be fast enough to drop billions of dollars in sales from Pfizer’s hands.
The big game card
How much money Pfizer will earn in the long run from BNT162b2 depends on a wildcard that is completely out of the company’s control. No one knows at this stage for sure how long any of the COVID-19 vaccines will provide protection against coronavirus infection.
If the protection period lasts several years, Pfizer will enjoy a large inflow of cash next year, followed by a sharp decline in 2022. If COVID-19 vaccinations are needed annually or more frequently, BNT162b2 – especially a freezing point- dried version – is likely to generate billions of dollars in revenue for Pfizer for a long time to come.
In that scenario, this great pharmaceutical will almost certainly become much bigger the next decade.