While much of the world focused on Pfizer and BioNTech’s positive COVID-19 vaccine news on Monday, analysts started gaming out potential ripple effects, namely for companies making coronavirus therapeutics.
A promising COVID-19 vaccine is obviously good news for drugmakers and the world at large, but companies developing and selling coronavirus treatments could see lower sales down the line, Barclays analysts wrote in a Monday note to clients. Gilead Sciences, Regeneron and Eli Lilly are key players on the therapeutics side, though there are many more with drugs in the pipeline.
Even after a COVID-19 vaccine launches, patients will need treatments, the analysts wrote. But the Pfizer news “should raise further questions around the mid-to-long-term durability of those revenue streams,” Barclays analysts wrote in a note to clients.
While stocks are up big Monday, the analysts said they expect share price pressure on drugmakers with leading therapeutics. Investors have higher revenue expectations for Gilead’s Veklury than they do for antibodies from Eli Lilly and Regeneron, the analysts wrote, so they expected “the most pressure” on the California drugmaker among that group.
Gilead was up about 1% at 12:30 p.m. ET Monday, compared with an increase of about 0.5% for Lilly and a 3% drop for Regeneron. The latter two are testing their antibodies to prevent infection as well as treat it.
Partners Pfizer and BioNTech reported on Monday that their mRNA vaccine candidate was more than 90% effective in an early analysis. While the partners are waiting a few more weeks for safety data—and ultimately need data on more patients—they could seek an FDA emergency use authorization later this month.
Meanwhile, efforts are underway to produce vaccine doses and set up the supply chain to make the shots available as quickly as possible. Pfizer said it can realistically deliver around 50 million doses this year and 1.3 billion doses globally next year.
A COVID-19 vaccine wouldn’t eliminate the need for other measures to fight the pandemic, of course. Scientists around the globe have been testing potential therapeutics since the start of the outbreak, and Gilead’s Veklury is already generating sizable revenues as the standard of care in hospitalized patients. Eli Lilly and Regeneron have antibody candidates at the FDA under emergency use consideration as the pandemic rages again.
If Pfizer were to win an FDA authorization, it would take many months to immunize the country at a time when cases, hospitalizations and deaths are expected to continue to surge, outlining the ongoing need for therapeutics, masks and other measures to contain the virus.