moderna (MRNA) was upgraded Friday on the likelihood it will follow Pfizer‘s (PFE) footsteps in raising the price of its Covid vaccine in 2023. MRNA stocks jumped on the news.
Pfizer plans to roughly quadruple the price of its Covid vaccine to $110-$130 per dose for recipients ages 12 and older. The transition to the commercial market will occur as early as the first quarter of 2023, Pfizer said in an email to Investor’s Business Daily. Today, the US government pays about $30 per dose of the BioNTech (BNTX) partner shot.
SVB Securities analyst Mani Foroohar expects Moderna to follow Pfizer’s lead.
“Assuming Moderna touts as a rational duopolist, it significantly improves the company’s ability to meet revenue expectations for 2023,” Foroohar said in a report.
During afternoon trading in the stock market today, MRNA stock rose 9.3% near 129.30. Pfizer shares also rose 4.2% near 44.70. BioNTech shares shot up 10% near 130.20. Novavax (NVAX), which recently received US authorization for its Covid injection and first booster, saw shares rise 8.8% near 18.70.
MRNA stock: Demand for covid recording is falling
The price increase will help bridge the dwindling demand for Covid vaccines and expectations for 2023. Analysts polled by FactSet expect $16.4 billion in revenue from Pfizer’s inclusion and $8.4 billion from Moderna’s. Those forecasts call for a sharp drop of 49% and 60%, respectively, compared to 2022 views.
SVB Securities’ Foroohar raised his price target for MRNA stocks from 74 to 101. He also raised the stock from underperform to a market performance rating. Still, he’s not quite sold on Moderna’s efforts with an updated flu shot and Merck’s partnership for a personalized cancer vaccine.
“We’re going to the sidelines and wait for a more attractive entry point on the long or short side,” he said.
Moderna representatives were unable to immediately comment on the company’s pricing plans.
New challenges in the commercial market
Pfizer’s updated pricing comes when the US health emergency ends. The company expects most commercial insurance patients will continue to pay nothing out of pocket for Covid injections. Pfizer also says it plans to provide free vaccine to eligible uninsured patients through a program.
Pfizer notes that the transition to the commercial market includes challenges of distributing the vaccine through multiple channels and payers, rather than strictly through government. This is expected to pose a challenge for MRNA stocks as well.
The company also expects its customers to request more single-use vials. This limits the amount of unused vaccine that expires. But single-dose vials are three times more expensive to make and more expensive to ship than multi-dose vials.
However, despite the jump for Moderna and Pfizer stocks, both stocks remain under pressure. MRNA stocks peaked recently in August, but have since fallen. Pfizer’s stock has been in a downtrend since July.
Follow Allison Gatlin on Twitter at @IBD_AGatlin.
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