Pfizer to gear up capacity on 'durable' demand for Covid-19 vaccines, CEO says

Revenue from Covid-19 vaccines contributed $3.5bn to quarterly revenue of $14.6bn, which was 45% higher than the same period last year

US regulators expanded the use of Pfizer's shot to those as young as 12. AP
US regulators expanded the use of Pfizer's shot to those as young as 12. AP

Pharmaceutical giant Pfizer is gearing up capacity for Covid-19 vaccines to be able to provide at least 3 billion doses by next year as it anticipates "durable demand" for the shots, its chief executive said.

The company has so far shipped 430 million doses of the vaccine it has developed in partnership with Germany's BioNTech to 91 countries, chairman and chief executive Albert Bourla said on an investor call last week.

"Based on what we have seen, we believe that a durable demand from our Covid-19 vaccine, similar to that of the flu vaccines, is a likely outcome," Mr Bourla said.

"We want to be a long-term partner to health authorities around the world in their ongoing efforts to combat Covid-19, including their planning for an ongoing pandemic vaccination approach that is fit-for-purpose to local requirements."

Pfizer said revenue from the Covid-19 vaccines contributed $3.5 billion to its quarterly revenue of $14.6bn, which was 45 per cent higher than in the same period last year and ahead of analysts' expectations. First quarter profit also rose 45 per cent to $4.88bn.

On Monday, the US Food and Drug Administration (FDA) authorised the use of the Pfizer-BioNTech vaccine on children aged 12 to 15 years old.

Acting FDA commissioner Janet Woodcock said the decisions "allows for a younger population to be protected from Covid-19, bringing us closer to returning to a sense of normalcy and to ending the pandemic."

The FDA previously granted an emergency use authorisation for the Pfizer-BioNTech vaccine to individuals aged 16 and older.

Pfizer's partner in the Covid-19 vaccine, BioNTech, reported a €1.13bn ($1.37bn) first quarter profit on Monday as revenue surged to €2.05bn, up from just €27.7 million in the same period last year. The companies have so far signed orders for 1.8 billion doses for delivery this year, as well as a number of contracts for delivery "for 2022 and beyond", BioNTech said.

Mr Bourla told investors last week that Pfizer expects revenue of $26bn from its Covid-19 vaccine this year, with the company's full-year sales guidance raised to $70.5bn-$72.5n

"We are in discussions with a number of countries around the world for multi-year contracts for the potential supply of Covid-19 vaccine doses during 2022 and beyond," he said.

The company recently signed an agreement with the UK to supply 60 million extra doses this year, with Israel to supply millions of doses next year and with Canada to supply 125 million doses next year and in 2023, with an option to supply 60 million more by 2024.

Pfizer's shares were up 0.71 per cent to $39.86 at the close of trading on Monday, giving the company a market cap of $222.35bn. Following last week's results, JP Morgan raised its sales estimate for the company, saying it expects Pfizer to sell about $31bn of Covid-19 vaccines this year and $21bn in 2022, although it maintained its current target price of $40 on the company.

"We expect Covid vaccine sales to remain a focal point for the company and we still see room for upside to both Pfizer's 2021 guidance as well as consensus sales in 2022. That said, we continue to forecast a meaningful step down in [Covid-19 vaccine] sales in 2023 and beyond," a note from analysts including managing director Chris Schott said.

Mizuho Securities, which has a price target of $42 on Pfizer's shares, warned of "potential developments leading to structural changes in how drugs are priced in the US", with President Joe Biden last week calling for patents to be suspended on Covid-19 vaccines and treatments.

"Our current Pfizer estimates assume little to no growth coming from price increases, and while we expect continued rhetoric around drug pricing, we do not expect any major new policies to be implemented that would dramatically impact Pfizer’s outlook, at least in the near- to-mid term," Mizuho analysts including managing director Vamil Divan said.

Updated: May 11, 2021 06:43 PM

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