From Pfizer to Moderna: who’s making billions from Covid-19 vaccines?
The companies in line for the biggest gains – and the shareholders who have already made fortunes
Sat 6 Mar 202
The arrival of Covid-19 vaccines promises a return to more normal life – and has created a global market worth tens of billions of dollars in annual sales for some pharmaceutical companies.
Among the biggest winners will be Moderna and Pfizer – two very different US pharma firms which are both charging more than $30 per person for the protection of their two-dose vaccines. While Moderna was founded just 11 years ago, has never made a profit and employed just 830 staff pre-pandemic, Pfizer traces its roots back to 1849, made a net profit of $9.6bn last year and employs nearly 80,000 staff.
But other drugmakers, such as the British-Swedish AstraZeneca and the US pharma Johnson & Johnson, have pledged to provide their vaccines on a not-for-profit basis until the pandemic comes to an end.
Whether the market remains a money-spinner in the future depends on whether the vaccines become the type that need just a one-off shot – as for measles – or if regular vaccinations will be required, such as for flu. But in the immediate future, there are big financial returns up for grabs.
Here, we look at who is in line for the biggest gains – and which shareholders have already made fortunes.
Pfizer/BioNTech mRNA vaccine Pfizer’s Comirnaty vaccine, developed with Germany’s BioNTech, is based on re-engineered messenger RNA – the molecule that sends genetic instructions from DNA to a cell’s protein-making machinery. It was the first to be approved and has to be stored at ultra-low temperatures (-70C). Governments have ordered about 780m shots, including the US (200m doses for $3.9bn) and the EU commission (300m), while 40m doses will go to lower-income nations via the Covax facility. It costs $39 (£28) for two doses in the US and about $30 in the EU.
Expected sales in 2021: $15bn-$30bn
Pfizer, which splits costs and profit margins equally with BioNTech, expects $15bn in 2021 sales based on current deals. The final number could be twice as high, as Pfizer says it can potentially deliver 2bn doses this year. Barclays analyst Carter Gould is predicting sales of $21.5bn in 2021, $8.6bn next year and $1.95bn in 2023, on the assumption that the jab is given as a one-off shot.
Share price change over the past 12 months
Pfizer: +1.8%
BioNTech: +156%
The two founders of BioNTech, the husband and wife team Ugur Sahin and Özlem Türeci – both doctors – became multibillionaires last year, when the potential of the vaccine and the deal with Pfizer prompted the shares to surge.
Moderna mRNA vaccine The vaccine produced by the US biotech firm, based in Massachusetts, must be stored at freezer temperature (-20C). The UK has ordered 17m doses, the EU bought 310m with an option for a further 150m in 2022, while the US government ordered 300m shots. Japan purchased 50m shots. Moderna charges $30 for the required two shots in the US and $36 in the EU.
Expected sales in 2021: $18bn-$20bn
Moderna has said it expects 2021 sales of $18.4bn. Barclays analyst Gena Wang forecasts sales of $19.6bn, $12.2bn in 2022, and $11.4bn in 2023, assuming recurring vaccinations.
Share price change over past 12 months
+372%
A group of investors that backed the company when it was founded in 2010 will have made substantial returns. The chief executive, Stéphane Bancel, a 48-year-old French executive, owns 9% of the shares, now worth nearly $5bn.
Johnson & Johnson Adenovirus vaccine J&J’s jab, the world’s first single-shot Covid-19 vaccine, was developed by its Janssen division in Belgium. It uses adenovirus-26, a rare variant of cold virus. It was approved in the US in late February and can be stored at standard fridge temperatures for at least three months. Big orders include the US, UK (30m doses plus option for 22m), the EU (up to 400m doses), and Covax nations (500m doses through 2022).
Expected sales in 2021: up to $10bn
The company aims to deliver at least 1bn doses this year, which would generate $10bn. The US government has ordered 100m doses, with the option to buy 200m more, and is paying $10 a shot.
Share price change over past 12 months
+7.7%
AstraZeneca Adenovirus vector vaccine The vaccine developed with Oxford University uses a modified chimpanzee cold virus and can be kept at fridge temperature. Viral vector vaccines use a harmless virus to deliver a piece of genetic code to cells. Big orders have come from the UK (100m), the EU (up to 400m), the US (300m) and Japan (£120m).
Expected sales in 2021: $2bn-$3bn
Analysts at SVB Leerink are forecasting sales of $1.9bn this year and $3bn in 2022. The 2021 figure could be far higher if AstraZeneca achieves its ambitious target of 3bn doses. The company has pledged to supply the vaccine on a not-for-profit basis during this pandemic, and charges $4.30 to $10 for two doses.
Share price change in last 12 months
-8.6%
Sinovac Inactivated virus vaccine The CoronaVac jab has been administered for emergency use in several Chinese cities since last summer, and was approved by China’s regulator in early February. Sinovac, which is based in Beijing, has struck deals with Brazil, Chile, Singapore, Malaysia and the Philippines. In January, Turkey and Indonesia kicked off their vaccination campaigns with the jab. Sinovac also plans to supply 10m vaccine doses to Covax nations.
Expected sales in 2021: billions of dollars, but unclear
Sinovac says it can produce more than 1bn doses this year. The vaccine has been priced at $60 for two shots in some Chinese cities. Sinovac’s Indonesian partner Bio Farma, which has ordered at least 40m doses, said it would cost $27.20 for two doses locally.
Share price change in last 12 months
-21.6%
Gamaleya Institute/Russian Direct Investment Fund Adenovirus vaccine Although it has not been approved by the EU regulator yet, Hungary and Slovakia have bought the Russian vaccine Sputnik V. In total, more than 50 countries, including Iran, Algeria and Mexico, have ordered it. AstraZeneca is testing a two-shot combination of its vaccine with Sputnik.
Expected sales in 2021: unclear but possibly billions
The developers are struggling to mass-produce Sputnik in Russia, but RDIF, a sovereign wealth fund, told the Financial Times last month that it had signed contracts with 15 manufacturers in 10 countries to produce 1.4bn jabs. The developers have said they would charge $20 or less for the required two doses internationally but are providing it free in Russia.
Novavax Recombinant protein vaccine The Novavax vaccine uses a small fragment of a lab-made version of the Sars-CoV-2 spike protein. The US firm hopes for regulatory approval in the UK, US and other countries in the first half. The company has been researching vaccines for more than 30 years and has never before had a jab approved. It has agreed to supply 300m doses so far, including the UK (60m doses), EU, Canada and Australia. It hopes to produce 150m doses a month and is expected to be cheaper than rivals. According to the Financial Times, the company has agreed to charge $3 a shot in Africa. The vaccine will also be made in Stockton-on-Tees, in north-east England, and can be be kept at fridge temperature.
Expected sales in 2021: ‘several billion dollars’
Based on these deals, Novavax said this week it sees “the potential for several billion dollars in revenue in the next 12 months”. This is set to rise, as Novavax expects to be able to make 2bn doses a year by mid-2021, thanks to a partnership with the Serum Institute of India.
Share price change in the past 12 months
+1,128%
The biggest financial gains will go to fund managers such as Vanguard and BlackRock, who are the biggest shareholders.
CureVac mRNA vaccine CureVac expects to publish late-stage results for its CVnCov vaccine in April and hopes to gain EU approval by June. The EU has pre-ordered 225m doses with the option to buy a further 180m. Unlike other mRNA vaccines, CureVac’s shot can be stored at fridge temperature. Together with GSK, which owns nearly 10% of the German firm, it is seeking to develop next-generation shots for multiple emerging Covid-19 variants in one vaccine.
Expected sales in 2021: unclear – pricing not yet revealed, but priced at a profit
The Nasdaq-listed biotech aims to produce up to 300m doses this year and 600m to 1bn doses in 2022. CureVac says its jab requires less active ingredient than rivals but insists it cannot price it at cost because investors are expecting a return.
Share price change
+45.5%
The biggest shareholder is German billionaire Dietmar Hopp, the co-founder of the software firm SAP. He owns more than 80% of CureVac, now worth more than $12bn.
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UK drug companies fined £260m for inflating prices for NHS
Watchdog issues warning after abuses that included paying would-be rivals to stay out of the market
Jillian Ambrose
Thu 15 Jul 2021
The UK’s competition watchdog has imposed fines totalling more than £260m on pharmaceutical companies after an investigation found that they overcharged the NHS for hydrocortisone tablets for almost a decade.
The Competition and Markets Authority (CMA) found that the drug’s makers Auden Mckenzie and Actavis UK, now known as Accord-UK, used their position as the sole providers of hydrocortisone to inflate the price of the drug. Tens of thousands of people in the UK depend on hydrocortisone tablets to treat adrenal insufficiency, which includes life-threatening conditions such as Addison’s disease, the CMA said.
The investigation found that the companies were able to inflate the price of hydrocortisone tablets by more than 10,000% compared with the original branded version on sale in 2008. This meant the amount the NHS had to pay for a single pack of 10mg tablets rose from 70p in April 2008 to £88 by March 2016.
The companies also paid would-be rivals to stay out of the market, the watchdog found.
“These are without doubt some of the most serious abuses we have uncovered in recent years,” said Andrea Coscelli, the chief executive of the CMA. “The actions of these firms cost the NHS – and therefore taxpayers – hundreds of millions of pounds.”
Before April 2008, the NHS spent about £500,000 a year on hydrocortisone tablets but this had risen to more than £80m by 2016.
The decision to increase the price of de-branded drugs meant that the NHS “had no choice but to pay huge sums of taxpayers’ money for life-saving medicines” and reduce the money available for patient care, Coscelli said.
“Our fine serves as a warning to any other drug firm planning to exploit the NHS.”
Accord-UK plans to appeal against the CMA’s decision. A spokesman said the company was “very disappointed” by the fine, which relates to activity before the company acquired Actavis in 2017. It said it has “done nothing but continuously reduce the price in the face of significant competition” since the acquisition.
“We maintain that the case against Accord Healthcare is flawed legally and in respect of material facts. We are therefore considering all our options and intend to appeal the decision,” the spokesman added.
The CMA has found that Accord-UK should be held solely liable for £65.6m of the total £260m fine, while its former parent company, Allergan, should be solely liable for £109.1m. The pair are jointly liable for a further £2m. Accord-UK, Accord Healthcare and the current parent company, Intas, are jointly and severally liable for £44.4m.
The CMA’s total fine for would-be rival AMCo’s conduct is £42.8m, and for Waymade is £2.5m.
Pfizer's 2021 profits doubled to US$22 billion on strong COVID vaccine sales
NEW YORK, United States (AFP) — Pfizer said Tuesday it expects US$32 billion in revenue from COVID-19 vaccines in 2022 as it reported annual profits had more than doubled to US$22 billion.
The pharmaceutical giant, which with German company BioNTech won approval for the first vaccine to counter the deadly virus, saw annual revenues nearly double to US$81.3 billion, with $36.8 billion from the COVID-19 vaccine.
Pfizer also expects US$22 billion in sales of Paxlovid, the company's pill for COVID-19, in 2022.
The results are the latest to show how the coronavirus has transformed Pfizer, which a year ago had projected just UD$15 billion in COVID-19 vaccines sales in 2021 and ended up selling more than twice that amount after repeatedly lifting the forecast.
Pfizer's scientists "continue to monitor the COVID-19 virus and believe it is unlikely that it will be fully eradicated in the foreseeable future," Chief Executive Albert Bourla said in a statement.
Pfizer's scientists "continue to monitor the COVID-19 virus and believe it is unlikely that it will be fully eradicated in the foreseeable future," Chief Executive Albert Bourla said in a statement.
It's always difficult to eradicate something that doesn't exist. A serious challenge indeed.
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