Why Pfizer and BioNTech are overtaking Moderna in the Omicron enhancer market

No company has yet released a booster that targets the omicron variant of the coronavirus. Nevertheless, Pfizer (PFE -1.73%) and his German partner BioNTech (BNTX 1.07%) they are fighting to do it. This is his main rival, modern (mRNA 0.18%).

There is a significant US market for omicron boosters even before the new vaccines are available. And there is already an anticipated winner. Pfizer and BioNTech appear to be outperforming Moderna in this market, at least so far.

win on two fronts

The US government has finalized supply agreements with Pfizer-BioNTech and Moderna that include the companies’ respective omicron boosters. Both agreements are for up to 300 million doses. However, there are a couple of important details in the supply deals that give Pfizer and BioNTech key advantages.

First, Pfizer and BioNTech received a much larger initial order than Moderna. The United States is buying 105 million doses of the Pfizer-BioNTech vaccine for delivery through the fourth quarter of this year. Moderna’s initial order is for 66 million doses.

To be sure, the US deal with Pfizer and BioNTech stipulates that it “may include Omicron-adapted COVID-19 vaccines for adults,” while Moderna’s deal is specifically for its bivalent booster that targets both the original coronavirus as a omicron. However, it seems likely that the US will primarily request Pfizer-BioNTech’s omicron boosters rather than the companies’ current version of the COVID-19 vaccine. Albert Bourla, CEO of Pfizer stated on the company’s Q2 call that Pfizer is targeting a fall launch of its omicron booster, pending regulatory clearance.

Second, Pfizer and BioNTech are charging a premium for their vaccine. The United States is spending $3.2 billion to buy the initial 105 million doses. That’s an average price of $30.48 per dose. Meanwhile, Moderna will receive “up to $1.74 billion” for the initial 66 million doses. The average price per dose is $26.36.

Behind the head start

Why were Pfizer and BioNTech terms more favorable than Moderna’s? This is probably due to the demand that has been seen so far for the different vaccines against COVID-19.

More than 356.7 million doses of the Pfizer-BioNTech vaccine have been administered. Moderna ranks a distant second, with about 227.5 million doses administered as of July 27.

Pfizer and BioNTech are well ahead of Moderna based on early reinforcements as well. While Moderna came much closer in counting the second booster, Pfizer and BioNTech are still in the lead with just over 11 million doses, compared to just over 10 million doses for Moderna’s booster.

A couple of other factors could also be at play. Moderna received significant US federal funding to help the company develop its initial COVID-19 vaccine, while Pfizer and BioNTech did not. Furthermore, the Biden administration appears to have had a less antagonistic relationship with Pfizer than with Moderna (mainly related to the pressure for Moderna to supply more vaccines to low- and middle-income countries).

Where the Modern prevails

However, Moderna is somewhat prevailing over Pfizer and BioNTech. For example, him vaccine stock it has soared more in recent weeks than the shares of its rivals.

One explanation behind this outperformance is that Moderna benefited more from its new US supply deal than Pfizer or BioNTech did from their deal. Moderna keeps all the proceeds from the COVID-19 vaccine, but Pfizer and BioNTech split their profits equally.

Perhaps Moderna’s omicron booster will finally enjoy greater demand than the competition. However, even if not, Moderna could still emerge as the biggest winner due to the company’s complete rights to its vaccines.

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