COVID-19 vaccine sales boost quarterly results of Pfizer & Moderna
May 11 2022 - Team Stockal
Pfizer’s upbeat first-quarter earnings
Pfizer Inc (PFE) posted bumper results for the first quarter of 2022, helped by strong sales of its COVID-19 vaccine and antiviral tablet. Net income of the pharmaceutical giant climbed 61% to $7.8 billion. Adjusted earnings of $1.62 beat analysts’ estimates of $1.47, easing concerns of lowered vaccine demand as economies worldwide return to normalcy.
COVID-19 vaccine sales contribute over 50% to Pfizer’s 1Q2022 revenue
Pfizer’s BNT162b2 or Comirnaty is the most widely used vaccine against coronavirus infection in the United States and the European Union. In the first quarter, the company sold $13.2 billion worth of COVID-19 vaccine, above market expectations of $10.6 billion. This pushed the overall revenue 77% higher to $25.66 billion – higher than analysts’ estimate of $23.86 billion. Having accounted for 45% of Pfizer’s annual revenue last year, Comirnaty continues to remain the major driving force behind the company’s total sales.
Exhibit 1: Pfizer’s Annual Revenue Since 2016
*Official company guidance given on Feb 8, 2022 and reaffirmed on May 3, 2022
Source: Statista, Pfizer Company Financials
Lowered 2022 earnings outlook
Pfizer lowered its full-year 2022 earnings guidance to $6.25 – $6.45 per share from the prior outlook of $6.35 – $6.55 per share. The company attributed this cut to higher research and development costs and an unfavourable currency exchange impact arising from a strengthened U.S. dollar against other currencies. The company raised its full-year R&D expenditure outlook to $11.0 to $12.0 billion from the previous range of $10.5 to $11.5 billion.
2022 vaccine sales: FDA nods in pipeline
Pfizer has reaffirmed its prior guidance for overall 2022 revenue to $98 to $102 billion, and it expects to generate $32 billion from COVID-19 vaccine sales. Pfizer is working to get the U.S. Food and Drug Administration approval for a three-dose vaccine regimen for children under the age of 5. The FDA is expected to give its nod in June this year.
Currently, anyone above 5 years of age is eligible for the first two doses of Pfizer COVID-19 shot in the United States. However, children in the age of 5 to 11 years are not yet eligible for a booster shot. Pfizer is seeking FDA’s approval for the same and a fourth shot for general public. The company is also hoping for an annual vaccination drive against COVID-19 after this. Moreover, Pfizer and its COVID-19 vaccine partner – BioNTech, are working to update the vaccine for a better protection against the Omicron variant of the virus.
Pfizer’s COVID-19 treatment tablet
Pfizer also reaffirmed annual sales guidance for its COVID-19 treatment tablet, Paxlovid, to $22 billion – lower than analyst estimates of $26.1 billion. However, the company is hopeful of a strong demand for the tablet because more people are likely to contract coronavirus infection as people move more freely without any restrictions. As per the trials, the antiviral pill reduces the risk of fatality or hospitalisation among high-risk COVID-19 patients.
The company expects to produce 120 million courses by the year-end. According to CEO Albert Bourla, Pfizer’s Paxlovid occupies a 90% market share in the United States as compared to Merck’s (MRK) Molnupiravir. Paxlovid is supplied to over 33,000 sites across the country. In the week ended April 22, 2022, about 80,000 patients were treated with the pill compared to a mere 8,000 patients in the week ended February 25, 2022. Among international markets, the medication has been approved by more than 60 countries and is on its way to enter other countries as well.
Moderna earnings, revenue triple in the first quarter
Moderna Inc (MRNA) reported stellar growth in the first quarter of 2022 with a threefold jump in revenue and net income. Net income jumped to $3.66 billion from $1.2 billion a year ago. Earnings at $8.58 per share crushed market expectations of $5.21 a share, on the back of bumper COVID-19 sales.
Spikevax: Moderna’s only commercial product
Spikevax – Moderna’s COVID-19 vaccine for people 18 years and above- is the company’s only commercially available product. Accounting for about 97% of total revenue, vaccine sales generated $5.9 billion in the first quarter, a steep rise from $1.7 billion a year ago. Total revenue jumped 213% to $6.07 billion in the quarter. Analysts were expecting $4.62 billion in revenue. Grant revenue and collaboration revenue contribute to the remaining 3% of overall company revenue.
Exhibit 2: Moderna COVID Vaccine Quarterly Sales (in Billion)
Source: Company Financials
Moderna on an acquisition hunt
As of 31st March, 2022, Moderna had $19.3 billion in cash, compared to $17.6 billion in December. Though investing in product pipeline remains its first priority, Moderna is actively looking for mergers and acquisitions opportunities. CEO Stephane Bancel said during the earnings call, “In terms of M&A, I can tell you our teams have never been as busy. They are looking at a lot of opportunities literally across the world. We will not be shy to invest to expand the platform either through technology or through products.”
$21 billion of vaccine sales expected this year
Moderna has signed advanced purchase agreements (APAs) worth $21 billion for its COVID-19 vaccine sales this year. These agreements are signed with governments and excludes any orders from the United States; hence the actual figures may be higher. However, the sales numbers in 2022 could come lower than the $21 billion forecast if the COVAX global vaccine-sharing initiative does not confirm demand for additional shots from low to middle income countries.
According to CEO Bancel, the company sees higher sales in the second half of the year than in the first half as governments are likely to order more doses for fall inoculation campaigns. This is because the coronavirus is expected to follow a more seasonal pattern requiring booster shots in the fall.
Like its rival Pfizer, Moderna is hopeful of receiving FDA’s approval in late summer for its updated vaccine that can target the omicron variant of the virus as well. Moreover, Moderna’s approval applications for vaccine use in children of age 0.5 to 5, 6 to 11 and 12 to 17 are under process. FDA nod for children’s vaccines that is expected to be received in June will add to further revenue growth of the company.