Demand for COVID vaccines drops Significantly: Moderna and Pfizer stocks plummet…

Pfizer Stock

Pfizer announced that it’s considering cost-cutting measures in light of potential losses arising from the lackluster demand for its COVID-19 vaccine and antibody treatment. This revelation underscores the broader decline in the market for COVID-related products, even as hospitalizations and COVID-19 cases experience a resurgence.

The Context

Despite initial optimism about high uptake rates, Pfizer has faced challenges related to decreasing demand for its COVID-19 offerings this year. For perspective, the company had estimated in January that 100 million doses of its COVID vaccine would be administered in the U.S. in 2023, expecting to account for a significant 60% of those shots. However, only 12.4 million doses were administered in the first half of the year, a fraction of the expected volume.

Insurance companies are likely to bear the cost when these products transition to the commercial market. Despite this, public interest in obtaining booster shots has remained low. Data from the CDC reveals that only 17% of Americans received the bivalent booster, which was authorized nearly a year ago.

Public Sentiment Shifts

There’s a noticeable shift in public sentiment. According to a recent Axios-Ipsos survey, a significant 60% of respondents expressed that the U.S. has dedicated enough time and resources to combatting COVID-19, indicating a desire to move past the pandemic era. This sentiment has increased from 50% in February.

Even with the dual challenge of a rise in COVID cases and an influx of flu and RSV cases that overwhelmed hospitals last autumn, experts anticipate that the weary public might be less inclined to seek additional vaccinations this year. The increased hesitancy around vaccines is evident.

CEO Albert Bourla mentioned the challenges in forecasting Pfizer’s future revenue in this sector, highlighting the toll it’s taking on their stock prices. “We are acutely aware that all these uncertainties are making it difficult to project the future revenues of Pfizer in this area and also affecting our stock prices,” he commented.

Financials Paint a Clearer Picture

Pfizer’s revenue figures tell a story of their own. The company reported revenue of $12.7 billion, marking a 54% decline compared to the same quarter the previous year. Their COVID vaccine revenue is projected to plummet by 64% relative to last year, and their Paxlovid antiviral therapy is anticipated to witness a 58% decline.

Looking Ahead

The coming months are crucial for Pfizer. The performance in the third quarter, especially aligned with the next booster campaign, will be pivotal in predicting their future trajectory. Should the COVID product revenues fail to meet expectations, Pfizer has indicated a shift towards an “enterprise-wide” cost-cutting strategy.

That said, it’s not all grim news for the pharmaceutical giant. Their substantial revenues during the pandemic have bolstered research and development in other domains. Pfizer is gearing up to introduce 19 new products and indications in the forthcoming 18 months. Additionally, they foresee a revenue boost from acquisitions, particularly the $10 billion deal to acquire Seagen, a prominent cancer biotech firm.

However, while Pfizer ventures into developing products such as the RSV vaccine for older adults, they face hurdles. The FDA has not universally recommended the vaccine for all seniors, potentially dampening demand.

In a twist, despite the decreased demand for COVID-specific products, Pfizer is delving into the development of a combined flu-COVID vaccine.

Industry-Wide Implications

All eyes are now on Moderna, another major COVID vaccine manufacturer, as it prepares to release its earnings this Thursday. The industry is keen to understand how this evolving situation will influence the future landscape of COVID treatments and therapies.

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