Moderna and Pfizer grapple with market challenges and future prospects

USA — Moderna, the renowned biotech firm responsible for the COVID-19 vaccine, recently experienced a significant decline in its market value, losing a staggering US$6.8 billion, as reported by Bloomberg.

This downturn was directly influenced by Pfizer Inc.’s downward revision of its profit outlook, highlighting concerns about the dwindling demand for COVID-19 vaccines and treatments.

The consequence of this downward spiral is evident in Moderna’s stock price, which has reached its lowest point since November 2020.

This stands in stark contrast to its previous sprint for COVID vaccine authorization in the United States. As Moderna confronts the challenge of moving beyond its immensely successful Spikevax vaccine, Wall Street analysts offer varying perspectives on the company’s future.

Out of the 24 analysts monitored by Bloomberg, half advocate for purchasing Moderna stock, while the other half, which includes prominent analysts like Hartaj Singh, urge caution.

Ten analysts recommend holding the stock, and two suggest selling. Notably, Moderna is actively demonstrating the adaptability of its messenger-RNA technology by working on treatments for diverse diseases, such as cancer, along with ambitious projects like a combined flu and COVID vaccine and an RSV vaccine, which are currently in progress.

From zenith to abyss

Since its peak in August 2021 when its market capitalization almost touched US$200 billion, the company’s stock price has plummeted by approximately 83%.

This sharp decline is a result of fading optimism regarding future COVID sales and a shift in investor interest toward stocks linked to groundbreaking weight-loss drugs, known as GLP-1s.

Surprisingly, Moderna, once likened to Tesla Inc., now finds itself among the poorest-performing S&P 500 stocks for the year.

Despite Pfizer’s gloomy outlook, Moderna remains steadfast in its full-year vaccine sales projections. The management still anticipates COVID shot revenues ranging between US$6 billion and US$8 billion.

Nevertheless, they acknowledge the difficulty of predicting future vaccination rates in the United States.

What lies ahead

Moderna is set to unveil its quarterly earnings on November 2. While the company is leveraging its pandemic success to develop a wide range of medicines, treatments, and vaccines for various ailments, including Lyme disease, the flu, HIV, RSV, Zika, norovirus, and genetic conditions, it is crucial to note that its COVID-19 vaccines remain its sole commercial product.

Consequently, Moderna remains vulnerable to the declining demand for these vaccines.

Pfizer’s rollercoaster and new developments

Pfizer, in a surprising turn of events, has slashed its annual revenue forecast by 13% due to the diminishing demand for its COVID-19 products.

The sales of the company’s mRNA shot, developed in collaboration with BioNTech, and its antiviral drug Paxlovid were responsible for securing record profits last year.

However, Pfizer had long cautioned about declining demand as the world, particularly the United States, emerges from the pandemic in the current year.

Pfizer’s projections for Paxlovid have been reduced by US$7 billion, and its COVID shots by approximately US$2 billion, surpassing analyst expectations.

To cope with this revenue downturn, Pfizer has initiated a US$3.5 billion cost-cutting program, encompassing job cuts and expense reductions.

Additionally, Pfizer has disclosed a write-down of US$5.5 billion in the third quarter due to the shrinking demand for its COVID stock, primarily stemming from inventory write-offs of Paxlovid amounting to US$4.6 billion.

The company also acknowledged a US$900 million write-off from COVID vaccine stock, a write-off that BioNTech similarly announced due to their profit-sharing agreement with Pfizer.

The company now foresees full-year sales within the range of US$58 billion to US$61 billion, with scaled-down sales forecasts for Comirnaty and Paxlovid, the antiviral pill.

In a notable development, Pfizer has unveiled a new agreement with the US government regarding the commercial market launch of Paxlovid in 2024, which includes the return of authorized doses and a credit arrangement.

In a separate development, Japan has expanded its vaccine procurement efforts, securing an additional 9 million COVID-19 vaccine doses from Pfizer and 1 million doses from Moderna.

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