- Pfizer expects revenues from the coronavirus vaccine it developed with German drugmaker BioNTech will total at least $15 billion this year, and potentially rise further should governments sign additional supply contracts for more of the 2 billion doses the companies expect to produce in 2021.
- The sales estimate, released by Pfizer Tuesday along with fourth quarter earnings, would likely make the vaccine Pfizer's top-selling product this year, and one of the most lucrative medicines in the drug industry. Pfizer splits gross profits from the vaccine with BioNTech through their partnership.
- Pfizer's forecast is several billion dollars higher than the roughly $12 billion worth of advance purchase agreements Moderna said last month it had signed for deliveries of its vaccine in 2021. Both companies' shots are cleared for use in the U.S., U.K., Canada and the European Union, and Pfizer's is authorized in more than a dozen others.
Governments in the U.S., Europe and other developed countries committed billions of dollars to pre-order doses of Pfizer and BioNTech's vaccine while the shot was still under development. Tuesday's earnings statement is the clearest look yet at the financial returns those agreements will yield the two companies.
Pfizer expects pre-tax profit margins in the high 20% range, suggesting the $15 billion in sales could translate into around $4 billion in income after accounting for manufacturing and distribution costs as well as BioNTech's share of revenue.
The Wall Street Journal in December reported Pfizer has spent $2 billion developing and manufacturing the vaccine. The company did not break out vaccine-related spending in its fourth-quarter earnings disclosure, although its income statement recorded year-over-year increases in both R&D spending and cost of sales.
The $15 billion revenue estimate is primarily based on doses currently under contract to be delivered this year, Pfizer said, meaning actual revenue could come in even higher if more agreements are signed. The company would not disclose how many doses of its 2 billion target for 2021 were reflected in the sales estimate, and noted that it didn't necessarily expect to sell every dose this year.
Umer Raffat, an analyst at Evercore ISI, estimates Pfizer has contracted to supply roughly 800 million doses.
Two hundred million of those doses are committed to the U.S., which paid roughly $20 per dose in two contracts worth $2 billion each. On an earnings call Tuesday, Pfizer CEO Albert Bourla said the company expects to deliver those doses by the end of May, two months ahead of the deadline set in contracts with the U.S.
The earlier-than-expected deliveries are due in part to a change in the number of doses counted in each vial. After pharmacists across the country noticed they could withdraw a sixth and sometimes a seventh dose from each five-dose vial, Pfizer successfully lobbied the Food and Drug Administration to officially change the labeling to account for a sixth dose, the New York Times reported last month.
With the world still struggling to control the spread of infection, and new virus variants raising concerns about the strength of immunity, Pfizer increasingly views vaccines sales as likely to become a "durable" part of its business.
"With the vaccine, I believe the dynamics in COVID-19 more and more indicate potential for repeated business," Bourla said Tuesday.
In particular, Bourla indicated Pfizer believes it's likely vaccinations would need to be boosted over time with an additional shot to maintain high levels of immunity. The threat of weaker protection from emerging coronavirus strains could also require new boosting strategies, especially if the pandemic lingers.
Mikael Dolsten, Pfizer's head of R&D, told analysts on the call that the company plans to test booster shots given six and 12 months after an initial vaccination.
"It may well be that a third boost at a proper time point is sufficient," said Dolsten, who also indicated Pfizer would consider developing a new booster vaccine that covers emerging virus variants.
Moderna, which developed its vaccine using similar technology as Pfizer and BioNTech, is also studying a third shot and has already begun work on creating a new booster.
Excluding sales of the vaccine, Pfizer forecasted revenue between $44.4 and $46.4 billion in 2021, up 6% from the $41.9 billion the company generated last year.
Editor's note: This story has been updated to inclue additional detail of Pfizer's expenses in 2020.