All three stocks are up spectacularly in 2021, thanks largely to the success and strong sales of their Covid-19 vaccines. But 2022 wasn’t so kind to them. Pfizer (PFE) shares are down about 15%, while Comirnaty vaccine partner BioNTech (BNTX) is down 35%. Moderna (MRNA) fared even worse, falling more than 40%.
What gives? Selling the Covid vaccines is not the problem. Pfizer has said that it expects revenue from Comirnaty, which it shares equally with BioNTech, to reach $32 billion in 2022, while Moderna forecasts it to post nearly $20 billion in sales this year could achieve with his coronavirus vaccination.
Part of the reason stocks have tumbled may simply be because investors were already anticipating strong demand and doing what traders do best: buy the rumor and sell the news. Pfizer’s stock is up more than 60% over the past year. BioNTech skyrocketed more than 215% in 2021, while Moderna stock soared nearly 145%.
Looking ahead, however, vaccines could still offer upside — particularly for shares in Pfizer and BioNTech. Health authorities in the United States earlier this week approved booster doses of the Pfizer/BioNTech vaccine for 5- to 11-year-olds. Pfizer could also get an extra boost from Covid treatments thanks to its antiviral pill Paxlovid, which was approved late last year. Pfizer has said it expects sales of Paxlovid to be $22 billion this year. Pfizer may be best positioned of the three vaccine makers to thrive beyond Covid. The company has been on a buyout frenzy lately, most recently announcing plans to acquire migraine drug maker Biohaven (BHVN) for nearly $12 billion earlier this month.
“The deal is a good use of cash for Pfizer, using its sizable war chest to diversify into an approved drug that could capture market share and significantly increase revenue,” said Stewart Glickman, an analyst at CFRA Research, in a Report after the Biohaven news.
The acquisition follows a nearly $7 billion deal late last year to buy Arena Pharmaceuticals, a company developing drugs to treat immune-inflammatory diseases. Pfizer also acquired cancer drugmaker Trillium Therapeutics for more than $2 billion last year. And even after all of those deals, the company still has about $24 billion in cash on its balance sheet.
Pfizer’s diversification is one of the main reasons analysts expect the company’s revenue to rise nearly 30% this year and earnings per share to rise more than 50%.
In contrast, Moderna, which isn’t nearly as diversified as Pfizer, needs to find another big blockbuster. Almost 97% of the company’s first-quarter sales came from its Covid vaccine. Moderna’s revenue is expected to rise about 20% this year, but analysts are expecting earnings to fall.
CEO Stéphane Bancel said during Moderna’s recent conference call with analysts earlier this month that two of the company’s key goals are to “expand beyond infectious disease vaccines into therapeutics” and find merger candidates. Moderna is also working on vaccines for other viruses like HIV and Epstein-Barr.
But the company also suffered from a major public relations slip recently. Moderna’s newly hired chief financial officer was forced to resign after just days in office after financial irregularities were revealed that are being investigated at his former employer Dentsply Sirona (XRAY), a maker of X-ray machines and other dental equipment.
Like Moderna, BioNTech is also a bit of a one-trick pony right now, with almost all of its first-quarter revenue coming from Comirnaty. Pfizer made only about half of its sales from the vaccine in the first quarter.