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Msg  1232 of 1244  at  11/20/2023 4:57:09 AM  by

jerrykrause


The Covid Vaccine Windfall Turns for Pfizer and Moderna; Reduced demand and revenue f

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The Covid Vaccine Windfall Turns for Pfizer and Moderna; Reduced demand and revenue for the jabs isn't bad news. The industry is working as it's designed.

 

The U.S. was in a fit of Covid panic during Thanksgiving week two years ago. The Omicron variant had emerged like a creature from the Black Lagoon. Public-health officials indicated we'd need another updated booster. Share prices in Pfizer and Moderna surged.

By month's end, Pfizer's stock-market value had surpassed $300 billion, up 50% from the start of the pandemic. Moderna's shares had soared by more than 1,000% over the same period. In 2022 Pfizer became the first pharmaceutical company to book more than $100 billion in annual sales owing to government purchases of its vaccines and antiviral pill.

Fast-forward to today. The pandemic is over. Demand for Covid vaccines and treatments has plunged. Pfizer's total revenue has fallen more than 40% since last year. Earlier this month the company took a $5.5 billion write-off on its Covid products owing to "lower-than-expected demand." Only 14% of American adults have received the latest updated booster shots.

Pfizer is laying off hundreds of employees as its stock is trading below where it was at the start of the pandemic. Moderna has lost more than $100 billion in market value over the past two years, and falling revenue is similarly pressuring the company's bottom line. In September it scrapped combination vaccines for Covid and the flu and another for pediatric human metapneumovirus and parainfluenza—all respiratory viruses that generally cause cold- or flulike symptoms.

But declining demand for Covid products is neither surprising nor bad news. If anything, it's a salutary development as it will drive pharmaceutical investment and research to better uses.

Recall that the purpose of the Trump administration's Operation Warp Speed was to reduce the risk and opportunity costs for developing vaccines to end a once-in-a-century pandemic. The vaccines flattened the curve for a time, to borrow the metaphor Anthony Fauci popularized. But two-thirds of Covid deaths have occurred since the vaccines rolled out in January 2021.

The jabs' greatest benefit was in providing political leaders with the courage to lift destructive lockdowns and mask mandates. The vaccines were supposed to be a two-shot-and-done regimen, not blockbuster medicines that rung up tens of billions of dollars in sales every year with government support.

But Washington rewrote the memo. From vaccine mandates to annual booster recommendations and misleading marketing campaigns, its salesmanship is matched only by its efforts to dump electric vehicles on an unwilling public. Statins and diabetes medicines prevent heart attacks, but the government doesn't run ads urging Americans to use Lipitor or Ozempic.

One enormous negative side effect of the government's vaccine boosterism is that it has increased public cynicism toward pharmaceutical companies at a time when innovation is advancing at warp speed.

Take gene therapies, which have the potential to cure lifelong inherited diseases. Unlike the Covid vaccines, these are one-time treatments. The Food and Drug Administration is poised next month to approve two therapies to reverse sickle-cell disease, which afflicts more than 100,000 Americans.

Researchers on Nov. 12 reported that the gene-editing technology Crispr could reduce cholesterol in patients born with heterozygous familial hypercholesterolemia. Pfizer is seeking FDA approval for a gene therapy that enables hemophiliacs to produce a coagulant so they don't have to get regular blood transfusions.

Covid vaccines were the first approved mRNA products, but the technology holds far greater promise in treating cancer and debilitating conditions for which the risk-benefit calculation from adverse side effects is much clearer.

Moderna is developing a personalized melanoma vaccine with Merck that trains the immune system to track down and kill cancer cells. A trial last year found the vaccine reduced the risk of death or cancer recurrence by 44% when combined with immunotherapy Keytruda. Last month BioNTech and Genentech launched a large trial for a custom-made vaccine to treat pancreatic cancer after an early-stage trial found it might have prevented or delayed relapses in about 50% of patients .

Then there is the new line of obesity medications by Eli Lilly and Novo Nordisk, which are locked in an arms race as Pfizer and AstraZeneca rush to catch up with their own drugs. Eli Lilly's and Novo Nordisk's drugs have been found to help overweight and obese patients— more than 70% of Americans —shed 15% to 20% of their body weight. The benefits aren't merely cosmetic. A study this month showed that Novo Nordisk's Wegovy reduced the risk of heart attacks, strokes and cardiovascular deaths by 20% over three to four years among overweight patients with cardiovascular disease. The drug mitigated the absolute risk of death by about 1%, saving one life for every 100 patients.

The potential market for these medications is huge, as are the public-health benefits, which is why Novo Nordisk and Eli Lilly are now valued at more than $900 billion combined. But don't expect investor euphoria to last. Competition will invariably reduce their profits. Drug makers can dine out on any given medicine only for so long before needing to cook up another pharmaceutical bonanza.

 


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