Coronavirus vaccine number No one is talking about (but it should be)

This is a big week in the fight against coronavirus pandemic 2019 (COVID-19). On Monday, Dec. 14, the first COVID-19 vaccine approved by the U.S. Food and Drug Administration (FDA) for emergency use was given to millions of frontline workers across the country. This comes with the fact that daily COVID-19 deaths in the U.S. amount to 3,000.

There are currently around two dozen vaccines and COVID-19 treatments in development, all of which could help prevent or stop the pandemic.

Vaccine developers deliver incredible efficiencies

It is the first vaccine to receive emergency use approval (EUA) from the FDA Pfizer‘s (NYSE: PFE) and BioNTech‘s (NASDAQ: BNTX) BNT162b2. In mid-November, Pfizer and BioNTech reported a baseline vaccine efficacy of 95% in their end-of-period trial. This is currently the high water mark for COVID-19 vaccine efficacy. Approximately 2.9 million doses of BNT162b2 were shipped to more than 600 preset locations this week to protect frontline workers.

However, the Pfizer / BioNTech initial move benefit is likely to be short-lived. On December 17, Moderna (NASDAQ: MRNA) its vaccine candidate, mRNA-1273, is expected to be reviewed by an FDA advisory panel. In the late COVE study, the Moderna vaccine delivered a primary efficacy of 94.1%. If it received a positive recommendation from the panel – the Pfizer / BioNTech vaccine was recommended for approval by a 17-4 vote, (with one stop – it would not be a surprise to send up to 20 million doses) within days.

Not to be forgotten, AstraZeneca (NASDAQ: AZN) and Oxford University also reported on efficacy for their COVID-19 candidate in November. One group, which received two total doses at least one month apart, showed a vaccine efficacy of 62%. An individual group, who received an initial half-dose with a total dose at least one month apart, showed 90% efficacy. While the overall effectiveness of these two arms was “only” 70%, AstraZeneca’s plan to sell its vaccine at a cost (around $ 3 to $ 4 per dose) could be more than enough to attract use.

According to Evercore ISI analyst Josh Schimmer in August, COVID-19 vaccines could be worth up to $ 100 billion in sales and $ 40 billion in after-tax profits. Figures like this are exactly why vaccine developers have become a hot commodity on Wall Street.

But there is a very important figure that no one seems to be talking about – but they should be.

Wall Street overlooks one monumental factor: Choice

Back in May, when researchers were still trying to learn all there was to know about COVID-19, the Pew Research Center asked Americans how willing they were to take a vaccine, if would be accepted today. About 72% of respondents wanted to be vaccinated. But by September, when Pew asked the same question to a new group of respondents, only 51% who were “sure” or “probably” were going to get the vaccine. In fact, the percentage of surveyors who “definitely” expect to receive the vaccine has been halved (42% in May vs. 21% in September).

As of July 1, 2019, the U.S. Census Bureau estimated that 77.7% of the 328,239,523 people in this country were ages 18 and older. If a Pew poll were to reflect the views of Americans across the country, that’s nearly 125 million adults who don’t want to be vaccinated.

For Pfizer / BioNTech, Moderna, and AstraZeneca / Oxford, full-course treatment involves two doses. The cost of the treatment is $ 39 for Pfizer / BioNTech, between $ 50 and $ 74 for Moderna, with the difference in price depending on how many vaccines a buyer buys (ie, country), and between $ 6 and $ 8 for AstraZeneca / Oxford, which chose to sell at cost. If we erroneously assume that every vaccine developer is responsible for a third of the U.S. market, we are talking about more than $ 4 billion in total lost shipping opportunity … just in the United States.

Perhaps a move toward coronavirus vaccination should be related to the fastest time period after which these treatments were developed. Although key efficacy has been relatively low, we still do not know whether the vaccine stops its spread, or, more importantly, how long these vaccines will protect the recipient. Without answers to these questions, we could be talking about tens of billions of dollars in lost global opportunity.

Betting on COVID-19 stock is risky

While vaccines clearly provide a way to end the pandemic, buying pharmaceuticals and biotechnology may not be a good idea because they develop a coronavirus vaccine.

For advanced developers like Pfizer, AstraZeneca, or Johnson & Johnson (NYSE: JNJ), has huge records of drugs and brand name devices to fall back on. But for clinical level developers like Moderna and Novavax, euphoria seems to be gaining the upper hand over investors.

Take Moderna as a good example. The company’s valuation has accumulated to more than $ 61 billion in the hope that mRNA-1273 will drive more than $ 10 billion in annual sales. While it’s actually possible to do so in 2021, Moderna’s sales are likely to return in each subsequent year when new treatments enter the market. It is worth noting that some of these middle and high end players may offer competitive advantages over Moderna. For example, the Johnson & Johnson vaccine only needs to be given in one dose. If it had a similar efficacy to mRNA-1273, the Moderna vaccine would be discontinued.

As I said before, Moderna is also valued north of 10 to 12 times the Wall Street consensus sales forecast for 2023. Biotech stocks are typically valued in the range of 3 to 6 times sales. annual.

In short, there is a suspicion with Wall Street that it may be over-valuing the shipping opportunity for these companies.