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By Michael Erman, Ludwig Burger and Manas Mishra
(Reuters) – Pfizer Inc unleashed a fresh wave of concerns about the long-term duration of the U. S. market for COVID-19 vaccines and treatments, sending shares of its German wife BioNTech and smaller rival Moderna tumbling lower on Monday.
Vaccine brands are counting on the U. S. market, as many countries conduct more limited annual campaigns to administer updated vaccines. For BioNTech, Moderna and Novavax, COVID vaccines remain their only approved products.
Shares of BioNTech fell 7. 2% in Frankfurt, while Moderna fell 5% and shares of Novavax, whose new vaccine is approved in the United States, lost 7% in New York.
Pfizer shares, however, rose only about 5%, boosted by a $3. 5 billion cost-cutting plan the drugmaker announced last Friday, along with its new sales outlook due to the COVID pandemic.
Pfizer cut its full-year sales forecast for its COVID antiviral treatment, Paxlovid, to about $7 billion and to about $2 billion for the vaccine it developed with BioNTech, due to a drop in use of pandemic-related products. cuts this year and next and that would make a write-off.
In a phone call with analysts Monday morning, Pfizer CEO Albert Bourla said he expects about 17% of the U. S. population to get the updated COVID vaccines thanks to the ongoing vaccination campaign, which is in line with last year’s but well below the rates seen when the vaccines were administered. It first made the impression in the spring of 2021.
Looking ahead, Bourla said the company expects this year’s demand to be the base rate, but is still watching the ongoing campaign to be sure.
The U. S. is “in the midst of COVID fatigue, where everyone needs to worry about the disease,” he said.
Moderna on Monday maintained its current profit forecast of between $6 billion and $8 billion for its 2023 COVID vaccine.
Mani Foroohar, an analyst at Leerink, which has an “underperform” score on Moderna, said it’s hard to trust the company’s market forecasts given the speed of vaccinations. So far this fall, about 7 million updated COVID vaccines have been administered in the United States.
Foroohar expressed concern about Moderna’s speed of liquidation and that the drugmaker would most likely end this year with less than $10 billion in money on its balance sheet, adding that it would likely want to cut prices further.
Jefferies analyst Michael Yee Pfizer’s new outlook on COVID implies lower-than-expected vaccine sales for Moderna.
Moderna will be quick to comment.
BioNTech, which relies on Pfizer’s vaccine-related profit-sharing bills for much of its revenue, said it would require an impairment rate of up to 900 million euros ($947 million), the same rate Pfizer announced on Friday.
BioNTech added that Pfizer had told it that most of the cancellations were due to raw materials, as well as stockpiles of older editions or other types of vaccines from the most recent edition currently in use.
Pfizer’s total non-cash rate of $5. 5 billion in the third quarter also includes $4. 6 billion in stock redemptions for its antiviral drug Paxlovid.
A BioNTech spokesperson on Monday declined to comment on the company’s current outlook for 2023. It will report its earnings on Nov. 6.
Pfizer shares, which are down about 37% this year, trade at 9. 8 times their 12-month earnings estimate, while BioNTech trades at 26. 7, according to LSEG data.
($1 = €0. 9498)
(Reporting by Ludwig Burger and Rachel More in Frankfurt, Michael Erman in New York and Bhanvi Satija and Manas Mishra in Bangalore; editing by Jonathan Oatis, Caroline Humer and Bill Berkrot)