The unprecedented scientific race to obtain a vaccine in the shortest possible time to stop the Covid-19 pandemic will also have financial results for its drivers. The main manufacturers of these antidotes are going to add tens of billions of euros in new business and, likewise, their profits will skyrocket in an unprecedented way.
Looking at the nine largest manufacturers involved in the most advanced and most important vaccines in the business in Europe and the US, during 2020, 2021 and 2022 they will have added around 48,000 million to their turnover, according to the calculations of this newspaper with the market consensus collected by Bloomberg. They are all listed firms. On the one hand, the biotechnology companies whose business depends almost entirely on the development of these products: Moderna, CureVac, Novavax and BioNTech. On the other, the pharmaceutical giants for whom the vaccine will be an additional business: Pfizer, AstraZeneca, Johnson & Johnson (J&J), Sanofi and GSK.
The sharpest and most spectacular case Of what it means for business to get a vaccine is seen in biotechnology firms, which currently have almost no business, since their activity so far has been to develop drugs but without being able to bring any to the market. Moderna, CureVac and BioNTech will make a giant leap from 179 million euros in sales in 2019 to add revenues of 24,052 million in 2020, 2021 and 2022.
These four biotecs their 2020 revenues are almost tenfold due to the first vaccine supply contracts, all of them experimental candidates awaiting approval. Although the real jump in business will take place from next year, since between the four they are expected to add sales of 12,182 million. It is precisely next year when the bulk of vaccination is expected in the world population. By 2022, they will add another 10,531 million.
The clearest cases of growth are foreseen for the German BioNTech, associated with Pfizer in the development of a vaccine, and the American Moderna. The German woman will bill almost 5,000 million next year, when her sales peak occurs, since her candidate against the coronavirus is the most advanced. In fact, phase III ended showing an efficiency of 95% and it is expected to be approved in the coming days in the US and Europe to begin its distribution before Christmas. If in 2020 the bulk of its distribution will take place, in 2021 it will still enter 3,112 million (last year it only billed 109 million).
Equally Modern will give a huge leap in income. Its vaccine, whose final manufacture is carried out by the Madrid laboratory Rovi for the whole world except the United States, is one of the most advanced in terms of terms. Its preliminary results indicate an efficacy of 94.5% and it is expected that in the next few weeks it will apply for commercial authorization in both the US and Europe. Its business will reach 4,160 million in 2021 and 4,156 million in 2022.
Record of earnings
The development of any pharmaceutical product usually involves hundreds of millions of investments and in this case it is also the case, which is reflected in the losses of these biotechnology companies so far. In 2020, these four companies will have 1,205 million in the red together. However, in 2021 they will shoot their profit to 6.035 million and in 2022 to 5.970 million. In total, 12,000 million earnings in the next two years.
BioNTech will be the one that most manages to increase its net profit, to 3.125 million next year. In the case of Moderna it will be almost 2,000 million and Novavax (which also has a phase III vaccine, in the last stage in tests with thousands of volunteers) will reach 830 million. However, CureVac will not make the big profit jump until 2022, with 985 million according to forecasts.
In the case of large pharmaceutical companies involved in manufacturing, it is much more complex to know to what extent the sale of these products will impact turnover, since in their case the forecasts collected by Bloomblerg include the joint business, which can range from consumer oncology, as in the case of Johnson & Johnson, which is investigating an alternative for the coronavirus through its Janssen subsidiary. However, Pfizer, AstraZeneca, J&J, Sanofi and GSK will also see their sales increase by 24.75 billion in three years.
“A quick calculation suggests that if the industry, for example, supplied a single dose of a vaccine at between 15 and 20 dollars per dose to only half of the world’s population of approximately 7 billion people, it would generate a revenue of 50 billion dollars or more. In addition, it is likely that at least two doses of the vaccines will be necessary and that more than half of humanity will be vaccinated ”, he explains about this business Olaf Tölke, Head of Corporate Rating at Scope.
One of them, AstraZeneca, has announced that it will distribute its vaccine – one of the most advanced in terms of deadlines and with an average effectiveness of 70% – in an initiative nonprofit while the pandemic lasts. In this case, the expected revenue of the British laboratory will go from more than 36,000 million in 2020 to almost 40,000 million in 2022. According to Bloomberg, its profit will go from 4,497 million to 6,972 million in two years. Other companies such as Johnson & Johnson and GSK (associated in this case in the development with Sanofi) also assured that in a period of pandemic they do not expect to profit from these supplies.
It must be remembered that in all cases these companies have received hundreds of millions from the United States and the EU in direct subsidies for vaccine R&D or through supply contracts. The think tank Policy Cures Research points out that countries and philanthropic initiatives have financed R&D with 4,580 million.
Stars of the moment. The small pharmaceutical companies that develop some of the vaccines against Covid-19 have seen their price skyrocket on the stock market this year, and more specifically since the outbreak of the pandemic in Europe and the United States as of March. Moderna and Novavax have accumulated increases of more than 400% since then, as has CureVac, which since it went public in August – to raise financing for the vaccine – has seen its shares soar by more than 410%.
Great ‘farms’. It is more difficult to see the effect of the vaccine on the price of Big Pharma, since they are companies with a much larger product portfolio and less dependent on the success or failure of the vaccine. From the department of analysis of Sabadell they recognize that in the case of Sanofi the impact will be discreet: “The normal thing is that they end up presenting a vaccine in the next year or year and a half, but in any case it should not be a game changer to the company”.
Modern. One of the great beneficiaries is the American company. From an analysis firm they believe that the development of the vaccine by means of messenger RNA – which gives the body instructions to produce the necessary antigen – allows validating this technology and extrapolating it to other vaccines.