Vaccine makers face revenue slump as demand falls for Covid-19 jabs

Makers of some of the most lucrative pharmaceutical products ever produced are headed for a slump in revenues as deliveries of Covid-19 vaccines almost halve next year, according to new forecasts.

Airfinity, a health data analytics group, said Pfizer, BioNTech and Moderna had begun raising vaccine prices but this would not fully compensate for the drop in demand for Covid inoculations in 2023. It forecasts sales of Covid-19 vaccines falling by about a fifth to $47bn next year.

The average price per dose next year will rise to $37, which is double the amount charged for Covid jabs in 2021. But prices may be a lot higher in the US, which is moving from government purchases to a private market and where Moderna has said it could charge up to $100 per shot.

Airfinity expects 1.6bn Covid vaccine doses to be delivered next year, compared with 3bn in 2022 and 5.7bn in 2021.

Vaccine makers are expected to update investors on Covid sales during third-quarter results next month, but analysts have begun cutting revenue forecasts, citing weaker than expected jab sales.

Last month analysts at Oddo Bhf, a Frankfurt-based finance group, cut BioNTech’s revenue forecasts for 2022 and 2023 by 28 per cent and 33 per cent to €14.1bn and €10.6bn respectively.

Jefferies told investors last week it expected Moderna’s third-quarter vaccine sales to be $2.5bn-$3bn, below Wall Street consensus estimates of $4.4bn.

SVB Securities said it expected Pfizer to generate $96.2bn in revenues in 2022, down from an earlier forecast of $99.5bn. It forecast 2023 revenues at $78.4bn, down from $82.1bn.

Pfizer, BioNTech and Moderna are pouring resources into drug development in other areas beyond Covid in search of growth opportunities.

Pfizer aims to launch several potential blockbuster drugs capable of earning more than $1bn annually next year, including a vaccine targeting respiratory syncytial virus and a treatment for alopecia. It has also acquired several biotech companies with drug candidates in late-stage development, including Biohaven Pharmaceuticals and Arena Pharmaceuticals.

“From a public health point of view I think we’re doing important things and I think that will translate to revenues and a return to Pfizer,” William Gruber, senior vice-president of Pfizer vaccine clinical research and development, told the Financial Times.

Moderna has a pipeline of more than 40 drug candidates but has no products beyond its Covid shot currently on the market. BioNTech is in a similar situation and is racing to develop cancer drugs using messenger RNA technology.

But this has not halted an investor sell-off in the shares of the three mRNA vaccine makers, with Moderna down 43 per cent, BioNTech down 41.5 per cent and Pfizer shedding 24.3 per cent year-to-date.

New entrants Novavax and Sanofi/GSK, the latter of which aims to get their Covid jab approved this year, will struggle to gain market share as Covid becomes endemic and public apathy to getting inoculated rises.

The mRNA vaccines made by BioNTech/Pfizer and Moderna are forecast to increase market share on a revenue basis to 94 per cent in 2023, up from 87 per cent this year.

Matt Linley, Airfinity analytics’ director, said the mRNA jabs could charge more than rivals because they had performed so well and shown they can adapt quickly to develop jabs to target new variants.

Shares in Novavax, which cut its 2022 revenue forecast in half to between $2bn-$2.3bn in August, are down 86.2 per cent this year.