COVID-19 sales boom for vaccine and drug makers might be over - analysts
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As the demand dries up and the pandemic evolves, Wall Street projects the sales for COVID-19 vaccines and therapeutics to plateau amid ample supplies while companies continue to assess the outlook.
âThis year is probably the peak, then going forward, itâs going to decline,â The Wall Street Journal reported Tuesday, citing Cantor Fitzgerald analyst Louise Chen. âThe question is how much?â Chen added.
Pharma giants Merck (MRK) and Johnson & Johnson (JNJ) have already cut the sales forecasts for their COVID-19 products, while vaccine makers Moderna (MRNA) and Pfizer (NYSE:PFE) have reiterated their projections.
The analysts attribute the cloudy outlook to factors such as slowing demand and adequate supplies in many countries. Meanwhile, people have opted for boosters at a lower rate than they received initial vaccine regimens, further crippling the demand.
The demand for drugs has declined partly because vaccine-driven protection has enabled many to avoid illnesses requiring therapeutics, which, in some cases, have become inefficient against a mutating virus, The Journal said.
âThe revenue stream was going to go away at some point; itâs just going away a little fasterâcertainly faster than what companies were saying,â Mizuho analyst Vamil Divan argues.
However, sales could still surpass expectations if governments ink new contracts, cases of severe illnesses increase or if there is a requirement for updated vaccines.
The outlook will also rise if the U.S. government, which drove the pandemic-era procurements of vaccines and drugs, shift reimbursements to the private sector leading to higher prices.
âItâs really challenging to predict what demand will look like or how peopleâs behavior will change as this virus continues to evolve,â Barclays analyst Carter Gould wrote.
However, JPMorgan has lowered its estimates for Pfizerâs (PFE) COVID-19 therapy Paxlovid by about $5 billion to $28 billion for 2022. Barclays trimmed its 2023 Paxlovid sales estimate to $9.5 billion from $10 billion and vaccine sales forecast to $20 billion from $23.3 billion.
Meanwhile, Wall Street expects Johnson & Johnson (JNJ) to generate $495 million sales from its COVID-19 vaccine this year compared to $2.4 billion last year.
Leading COVID-19 vaccine developers Pfizer (PFE), BioNTech (BNTX) and Moderna (MRNA) are trading lower in the pre-market along with oral drugmakers Merck (MRK). Johnson & Johnson (JNJ) is trading flat.
Read: In April, the data analytics firm Airfinity cut its 2022 global sales forecast for non-Chinese COVID-19 vaccines by three billion doses.