The Vaccine Club- Fall Will Be The Ultimate Test

These days, Pfizer PFE and Moderna MRNA are swimming in real money and they have COVID-19 to thank. Since the beginning of April, Moderna and BioNTech BNTX saw their shares go up about 80% and 100%, respectively. Much of that climb has been on the assumption that people receiving their gene-based vaccines would need annual booster shots which should generate billions more in revenue and create a bridge to new opportunities as in treating other diseases. 

The "Optimism" 

Pfizer expects that the COVID-19 vaccine it brought to life with BioNTech will generate sales of around $26 billion this year. Based on its advance purchase agreements on March 31^st, Moderna anticipates that its COVID-19 vaccine to generate sales higher than $19 billion. There are a few reasons why Pfizer and Moderna could soon be big winners in a new $22 billion market.

A Huge Market Just Became Accessible

Until recently, the Indian government was requesting COVID-19 vaccine makers to conduct clinical studies in the country. However, Drugs Controller General of India has removed this requirement, opening the country's doors to COVID-19 vaccine makers.

A $22 Billion-Plus Opportunity 

India continues to report large number of COVID-19 cases with only 3.3% of the population being fully vaccinated. An approximate of the market size of those who are yet to receive the vaccine is about 750 million. 

The Hurdles 

First, Pfizer and Moderna won't be the only players in India. AstraZeneca AZN, Bharat Biotech, and Russia's Gamaleya Research Institute of Epidemiology and Microbiology have all received emergency authorizations for their respective vaccines.

Second, there's no guarantee that the majority of Indians will want to receive a vaccine as there are reports of significant vaccine hesitancy in the country.  

Third, Pfizer's and Moderna's vaccines could be ineffective at providing protection against the Delta variant that's prevalent in India, although so far, both have fared pretty well against emerging coronavirus variants. However, a recent study found that Pfizer's vaccine is less efficient against India's Delta variant.  

Risks – Immunity May Last Longer Than Predicted

Despite Moderna and Pfizer CEOs being vocal about boosters being needed in the fall and that the market for boosters was even bigger than he originally thought, the advisory panel of the U.S. Centers for Disease Control and Prevention recently concluded that the evidence for booster shots doesn't yet exist. The extremely rare risk of heart complications in those vaccinated will also continue being monitored.

Recent studies back up the CDC's hesitancy as they show durable protection. Even as this virus keeps mutating, the immune cells that produce antibodies appear to be strengthening their defenses to fight the variants. 

Only Mutations Will Drive Booster Demand 

Some experts believe that the need for boosters can come only after the virus mutates further, not from declining immunity. Although RNA viruses like SARS-CoV-2 tend to mutate quite a bit, coronaviruses change at a rate of about one-quarter the rate of HIV and about half that of influenza, according to scientists.

By the looks of it, fall of 2021 will be the ultimate test.

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