How could Pfizer be affected by Moderna’s vaccine safety concerns?
Four countries have either suspended or discouraged the use of Moderna‘s (NASDAQ: mRNA) Spikevax COVID-19 vaccine in certain age groups. Sweden will not give the messenger RNA (mRNA) vaccine to anyone under the age of 30. Finland suspends the use of Moderna’s vaccine for men under 30. Denmark will not give Spikevax to anyone under the age of 18. Meanwhile, Norway is discouraging anyone under the age of 30 from receiving Moderna’s vaccine.
The Nordic countries have taken these steps because of potential safety concerns uncovered in a study by the Swedish Public Health Agency. The agency has determined that Moderna’s COVID-19 vaccine could cause inflammation of the heart muscle or the pericardium (the membrane surrounding the heart) in rare cases.
There is another mRNA vaccine on the market in all four countries – Pfizer‘s (NYSE: PFE) Commirnaty. How could Pfizer potentially be affected by Moderna’s vaccine safety concerns?
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The essential alternative
Finnish health authorities plan to offer Comirnaty to young men under 30 instead of Spikevax. Norway strongly encourages anyone under the age of 30 to get vaccinated by Pfizer and its partner BioNTech (NASDAQ: BNTX) instead of Moderna’s vaccine.
Comirnaty has fundamentally become Moderna’s vaccine alternative of choice for affected demographic groups. But why is this the case since Comirnaty and Spikevax use similar approaches?
Certainly, some cases of heart inflammation have also been reported with the Pfizer-BioNTech vaccine. However, these reports are less common than with Moderna’s vaccine. Two recent studies conducted in Israel found that the risk of heart inflammation in young men in Comirnaty is very low, with one study suggesting a likelihood of around one in 50,000.
Perhaps the most important difference between the two mRNA vaccines is the dosage. Moderna’s 100 microgram dose is more than three times the Pfizer 30 microgram dose.
Minimal financial impact
Decisions by several countries to suspend or discourage the use of Spikevax in certain cases weighed on Moderna’s stock, with stocks fall last week on the news. However, the negative financial impact on Moderna and the positive financial impact on Pfizer will likely be minimal.
The two companies have already concluded supply agreements with the European Commission for European Union countries (including Denmark, Finland and Sweden). They also have separate smaller supply agreements with Norway, which is not a member of the EU.
Moderna has received orders from the European Commission for 460 million doses of Spikevax to date. At least 150 million of these doses are expected to be delivered in 2022. Pfizer and BioNTech are supplying 600 million doses of Comirnaty to the European Union this year and an additional 900 million doses will be delivered in 2022 and 2023.
The data from the Swedish study has already been sent to the European Medicines Agency for review. It is possible that other large European countries are taking similar measures as in the Nordic countries with Moderna’s vaccine. But supply agreements already in place will not be affected by these decisions.
The bigger picture
Could potential safety concerns with Moderna’s vaccine make a difference in the fortunes of Moderna and Pfizer in the long run? It is at least possible that countries will choose to order more doses of Comirnaty and less Spikevax once current supply agreements are concluded.
However, these reported security issues are very rare. And safety is only a consideration for future supply agreements. Efficiency is also important. So far, the efficacy of Moderna’s COVID-19 vaccine appears to outlast that of the Pfizer-BioNTech vaccine.
In addition, the market dynamics of the COVID-19 vaccine could change significantly. Pfizer and Moderna are both developing new vaccines specifically targeting the variants. Questions remain as to how often boosters will be needed beyond 2022, if at all.
Probably the most likely scenario for these vaccine stocks is that the security issues that call for responses from the Nordic countries will not matter much in the short or long term.
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