Covid-19 Vaccine Contest Isn’t Over

Pfizer and Moderna might be first past the finish line with vaccines, but others could still grab market share

By Charley Grant

Johnson & Johnson could have interim efficacy data on its vaccine candidate in January. / PHOTO: LUIS ROBAYO/AGENCE FRANCE-PRESSE/GETTY IMAGES

The race to develop the first Covid-19 vaccines has been decided. The battle for market share is just beginning.

Regulators in the U.K. have authorized Pfizer PFE 3.53% and BioNTech’s BNTX 6.21% Covid-19 vaccine for emergency use, and U.S. regulators are scheduled to complete their own review as soon as late next week. 

U.S. vaccinations should begin shortly afterward, and regulators will likely authorize Moderna’s MRNA 1.41% vaccine before Christmas.

Both vaccines have been shown to be more than 90% effective in preventing symptomatic Covid-19 in late stage clinical trials, which raises the bar that future candidates will need to meet. 

A vaccine developed by Oxford University and AstraZeneca AZN 0.77% has shown far less impressive results. 

Investors have voted with their wallets: BioNTech’s New York-traded shares have rallied more than 30% over the past month, while Moderna’s stock has more than doubled over that same period.

That reaction makes some sense: After all, initial doses will be sold directly to governments at fixed prices, which means that huge profits are likely next year. And the success of the vaccine programs bodes well for other treatments the companies are developing that rely on similar technology.

Still, investors expecting that these two companies will dominate this huge market indefinitely are getting ahead of themselves. Key questions about the long-run value of each vaccine program are yet to be resolved.

For starters, the rollout of Pfizer and Moderna’s shots will take time: Pfizer has forecast it will manufacture 1.3 billion doses by the end of next year, while Moderna has forecast another 500 million to 1 billion by then. Since both vaccines require two shots for immunization, that would be enough to vaccinate about 1 billion people. 

That is a very rapid pace by normal standards, but urgency has never been higher due to the pandemic.

There will likely be strong demand for other programs that can meet a suitable efficacy bar. 

For instance, Johnson & Johnson JNJ 0.47% could have interim efficacy data on its vaccine candidate sometime in January, which would lead to a request for emergency use in February. 

Importantly, that vaccine requires just one shot, improving its convenience and appeal to the general public. 

Unlike Pfizer’s vaccine it can be stored with normal refrigeration, which makes global distribution a far less daunting proposition, especially at a single dose. 

If that vaccine is safe, those advantages mean it could be useful as a public-health tool even if efficacy isn’t quite as strong as with a two-shot regimen.

What’s more, key scientific questions that will affect vaccine developers’ stock prices have yet to be answered. It is unknown, for example, how long immunity given by any Covid-19 vaccine will last. 

A long-lasting vaccine would be wonderful news for the economy and for stocks most affected by the pandemic. But that would be bearish for vaccine developers: Even windfall revenues and profits won’t get far with investors if those sales are expected to wind down quickly.

For happy shareholders sitting on huge gains, it might be time to protect against the risk of a vaccine plot twist.

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