Moderna stock and BioNTech led a sell-off Monday among Covid vaccine makers after Pfizer slashed about $9 billion from its full-year guidance.
Pfizer said it wrote off about $5.5 billion in inventory during the third quarter due to lower-than-expected demand for its Covid products. Now, the company expects just $58 billion to $61 billion in full-year sales due to lower demand for Comirnaty, the vaccine developed with BioNTech, and antiviral pill Paxlovid. Pfizer reduced its outlook for Paxlovid, used to treat Covid-19, by $7 billion and cut $2 billion from its Comirnaty projections.
The company also took a knife to its adjusted earnings guidance for the year and now expects to earn just $1.45 to $1.65 per share. Previously, Pfizer expected earnings of $3.25 to $3.45 a share.
Still, Leerink Partners analyst Daina Graybosch expects a "massive uptick in demand" for the Covid shot and pill this year.
"We also anticipate an uptick in SARS-CoV-2 infections (the virus that causes Covid) as we head into the winter and holiday season could spur this demand," she said in a note to clients.
On today's stock market, Pfizer stock rose 3.6%, closing at 33.27. But shares of its peer group tumbled. Moderna stock skidded 6.5% to 91.94. BioNTech stock lost 6.4% and closed at 96.97. Novavax stock fell 6% to 6.63.
New Paxlovid Deal
Pfizer also outlined a new agreement with the U.S. government in anticipation of Paxlovid hitting the commercial market in 2024.
The government will return about 7.9 million doses of Paxlovid previously authorized for emergency use. Pfizer will receive a credit worth about $4.2 billion. The credit will go toward a patient assistance program to provide Paxlovid free for federally insured patients through 2024 and for uninsured and underinsured patients through 2028. The company will also provide 1 million doses for a strategic national stockpile.
Evercore ISI analyst Umer Raffat says the optics are bad as Pfizer plans to begin charging private insurers for Paxlovid in 2024. But there's a silver lining. He notes Pfizer hiked the price of Comirnaty when it hit the commercial market. The same is likely true for Paxlovid.
"Paxlovid was sold to the U.S. government for about $500 a course," he said in a report. "It's possible that commercial pricing is about three to five times that."
He estimates Pfizer could eventually net $1,100 per Paxlovid course — when offsetting for the free doses for federally, uninsured and underinsured patients. That leads to $5.5 billion in Paxlovid sales in the U.S. alone, he said.
Moderna Stock Faces Profitability Problem
None of that will help Moderna stock or BioNTech stock, however.
Leerink Partners analyst Mani Foroohar trimmed his price target on Moderna shares to 64 from 66 and kept his underperform rating.
"Pfizer's disclosure offers fresh evidence that Moderna's period of unprofitability will push the company towards restructuring," he said in a report.
Graybosch also trimmed her expectations for BioNTech sales to $4.4 billion this year. That's lower than the company's previous outlook for $5.3 billion in sales and analysts' forecast for $5.15 billion. But she maintained her outperform rating on BioNTech stock.
Follow Allison Gatlin on X, the platform formerly known as Twitter, at @IBD_AGatlin.
