Pfizer’s Revised COVID-19 Sales Forecast Causes Concern for Vaccine Market
Pfizer’s Outlook Impact on Vaccine Market
Pfizer’s recent update on its COVID-19 vaccine and treatment sales has raised concerns about the long-term prospects of the market. This announcement has led to a decline in the shares of its German partner, BioNTech, and its competitor, Moderna.
Pfizer’s Lowered Forecast
Pfizer has reduced its full-year sales forecast for its antiviral COVID treatment, Paxlovid, by approximately $7 billion. Additionally, the forecast for its vaccine developed with BioNTech has been lowered by around $2 billion. The decrease in demand for pandemic-related products is the primary reason for this adjustment.
Moderna’s Response
Moderna, Pfizer’s main rival in the COVID vaccine market, has stated that it remains confident in its demand outlook and has not made any changes to its forecast.
Pfizer CEO’s Perspective
Pfizer CEO Albert Bourla acknowledges that the current vaccination campaign is facing challenges due to COVID fatigue. He expects that only about 17% of the U.S. population will receive updated COVID vaccines during this campaign, which is similar to the previous year but significantly lower than the initial vaccination rates in spring 2021.
Future Vaccination Rate
Bourla believes that this year’s vaccination rate will serve as a foundation for future years. However, Pfizer is closely monitoring the ongoing campaign to ensure the accuracy of this expectation.
Market Impact
Following the announcement, Pfizer’s stock increased by 3.6%, while BioNTech’s shares dropped by 7.3% in Frankfurt. Moderna also experienced a 2.8% decline in New York.
Revenue Forecast
Moderna maintains its current revenue forecast of $6 billion to $8 billion for its COVID vaccine in 2023. On the other hand, Pfizer anticipates a non-cash charge of $5.5 billion in the third quarter, which includes write-offs for Paxlovid and the vaccine. BioNTech also expects write-downs of up to 900 million euros ($947 million).
Analysts’ Perspective
Analysts view Pfizer’s sales forecast reduction as more significant than anticipated. Jefferies analyst Michael Yee estimates that Moderna’s sales will be lower, with an expected vaccination rate of only 35 million to 40 million people in the winter, compared to Moderna’s forecast of 50 million shots.
Impact on BioNTech
BioNTech heavily relies on profit-sharing payments from Pfizer, and the write-offs will affect its 2023 revenue as well. Pfizer has explained that the write-offs primarily relate to raw materials and inventories of older or different vaccine versions.
Stock Performance
Pfizer’s shares have declined by approximately 37% this year, and they trade at 9.8 times their 12-month forward earnings estimate. In comparison, BioNTech trades at 26.7 times the same estimate, according to LSEG data.
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