Why 2023 Will Be a Huge Year for Vaccines
Until the pandemic hit, Wall Street largely ignored the vaccine market. This year will show there’s more to jabs than fighting Covid-19.
It has been three years since the pandemic woke up Wall Street to the opportunities in vaccines. It’s time for investors to look out for more big news on the jab front—and it isn’t all about Covid-19.
In 2023, drug companies will introduce the first vaccines for respiratory syncytial virus—known as RSV—and could roll out the first flu vaccine based on messenger RNA, or mRNA. It will also be a significant year for Covid-19 shots, which are expected to make their debut on the commercial market.
Before Covid-19 made Moderna MRNA -4.44% (ticker: MRNA), Pfizer PFE 0.37% (PFE), and BioNTech BNTX -2.17% (BNTX) household names, investors showed little interest in the vaccine business. Four big vaccine makers dominated the Western market, and opportunities for disruption seemed marginal.
While the sector is still dominated by legacy vaccine powerhouses, investors are now paying closer attention.
“Things that would have typically…been largely ignored [prepandemic] as far as the Street is concerned, now, with the dollars that have been made from vaccines over the past three years, they’re back on the radar,” says Jared Holz, a healthcare equity strategist.
For investors tracking the sector, here’s what to watch in 2023.
Commercial Covid-19 Vaccines
Since the onset of the pandemic, the federal government paid for all Covid-19 vaccine doses distributed in the U.S. That’s set to change next year, as vaccines enter the commercial market.
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Pfizer has said it expects to charge between $110 and $130 per adult dose, while Moderna has discussed a price between $64 and $100. Those prices are sharply higher than the rates the companies have been charging the U.S. government—around $30 for Pfizer’s updated vaccine, and about $26 for Moderna’s version.
Pfizer could have a competitive advantage, given its more established commercial infrastructure. The pie, however, is shrinking: Analysts expect Pfizer’s Covid-19 vaccine sales to roughly halve in 2023, to $17.2 billion, according to FactSet.
RSV Vaccines
Late 2022 birthed the “tripledemic,” a term that describes the havoc wreaked by a simultaneous surge in Covid-19, the flu, and RSV. During one week in mid-November, the Centers for Disease Control and Prevention counted 5.1 RSV-associated hospitalizations for every 100,000 people in the U.S., compared with 0.6 for the same week in 2019.
For now, there isn’t much to be done about RSV, but that’s likely about to change.
Pfizer and GSK GSK -0.14% (GSK) recently announced impressive data from Phase 3 trials of their respective RSV vaccines. Others, including Moderna and Johnson & Johnson JNJ 0.25% (JNJ), are working on their own RSV jabs, though Pfizer and GSK are expected to get to market first.
RSV is a common virus that normally causes mild symptoms in healthy adults, but can be serious and even deadly for older people and infants. Pfizer and GSK are both targeting the older adult market, while Pfizer is also preparing a version to administer to expectant mothers to protect their newborns.
The Pfizer and GSK trials are hard to compare, as they used slightly different definitions of severe disease caused by RSV, but both companies’ results seem promising. GSK’s efficacy figure appeared to be slightly higher.
Pfizer’s executives, however, say they will top GSK when it comes to selling the vaccine. “I think we will be the leaders in this market,” Pfizer CEO Albert Bourla told Barron’s in November. Pfizer also claims its vaccine has better “tolerability,” meaning a lower incidence of short-term reactions, like aches or fever.
Earlier this month, Pfizer said its RSV vaccine could bring annual revenue of more than $2 billion in 2027.
GSK, for its part, says that its vaccine could be the best on the market. “We believe our magnitude of result, consistently high efficacy, including in adults ages 70-79, good tolerability, and favorable safety profile give the GSK RSV vaccine candidate best-in class potential,” says Phil Dormitzer, GSK’s head of vaccines R&D.
The FDA is set to decide on whether to approve either or both of the vaccines for older adults by May. Recommendations from the CDC, and a potential rollout, could come following a June meeting of the agency’s vaccine advisers.
Also worth watching, though lagging behind the pack: Moderna is expected to release new data on its mRNA-based RSV vaccine in early 2023.
MRNA-Based Flu Vaccines
Following the success of mRNA-based Covid-19 vaccines, mRNA-based flu vaccines have been all the rage in Big Pharma. The early 2022 release of ho-hum performance data for mRNA-1010, one of Moderna’s candidates, has failed to dampen drug companies’ ardor.
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Today, mRNA-based flu vaccines are under development by Moderna, Pfizer, and Sanofi (SNY). The eventual goal is to develop combination vaccines that could protect against multiple viruses, including the flu, Covid-19, and RSV.
Moderna is waiting on Phase 3 data for mRNA-1010, expected early in 2023. If all goes well, regulatory approvals could begin by the end of that year, the company says. “Some countries might launch in ’23,” Moderna CEO Stéphane Bancel told Barron’s earlier this month. “The balance will launch in ’24.”
Pfizer says it also expects to launch an mRNA flu vaccine in 2024. One big question is whether companies will be able to price the new vaccines cheaply enough to compete with the established flu jabs, which cost around $15. Asks Holz: “Are the [mRNA] players in flu going to be able or willing to sell the flu vaccine for that price?”