FDA Supports EUA for Pfizer-BioNTech’s COVID-19 Vaccine

The Food and Drug Administration provided emergency use authorization, or EUA, for Pfizer PFE and partner BioNTech’s BNTX COVID-19 vaccine BNT162b2 on Dec. 11, only a day after a positive FDA advisory committee meeting, which supports our over EUR 13 billion in expected sales for the vaccine in 2021. However, we are not changing our fair value for either Pfizer or BioNTech as the EUA was largely expected. We believe the vaccine’s incredible speed to market reinforces the firms’ innovative power behind Pfizer’s wide moat and BioNTech’s positive moat trend.

Based on the vaccine’s strong efficacy (95%) and no major safety issues, we had expected emergency authorization. We expect full approval (under the more typical biologics license application process) in the middle of the first half of 2021, pending supportive final data (including six months of safety data for several thousand patients). We believe the initial strong efficacy and low rates of adverse events bode well for longer term follow up.

While cold temperate delivery challenges are present with the vaccine (BNT162b2 needs storage at -70°C±10°C), we expect Pfizer and BioNTech to overcome the issue with special temperature shipping. The companies continue to expect to produce 50 million doses in 2020 and 1.3 billion doses in 2021, all of which we expect to sell out. Pfizer is also guiding to 40% of the 2021 expected supply in the first half of the year, with 100 million doses expected to go to the U.S. by March.

We expect strong COVID-19 vaccine competition from Moderna (already reported excellent efficacy data and likely to receive an EUA in December), J&J, AstraZeneca, Sanofi, GlaxoSmithKline and many more, which will likely significantly stem the pandemic, but also reduce the profitability of the COVID-19 vaccine market. We expect the pricing power of the vaccines to be low with so many potential competitors, especially with several receiving government funding and stating a commitment to low vaccine pricing.

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