Two years ago at this time, the coronavirus epidemic was raging around the world, a new, worrisome variant appeared, which was named omicron, and epidemiologists called for an update of the Covid vaccines, because the previous vaccinations no longer provided adequate protection. This drove up the share price of vaccine manufacturers, so much so that By the end of November 2021, Pfizer’s market capitalization exceeded $300 billionwhich is 50 percent higher than the pre-epidemic level, the small biotechnology company, and the share price of Moderna increased more than fifteenfold during the same period.
Pfizer was the first pharmaceutical company to top $100 billion in annual revenue, thanks in large part to its Covid vaccines and antivirals being bought by governments around the world amid the pandemic.
However, now that the pandemic is over, sales of coronavirus vaccines and therapeutics used to treat them have collapsed.
Willingness to get vaccinated is extremely low, with only 14 percent of the adult population receiving the latest Covid vaccine in the United States. Pfizer recently $5.5 billion write-down recorded on its products related to the coronavirus, which it justified by the fact that demand was weaker than expected. The company’s third quarter revenues fell by more than 40 percent compared to the same period last year, which can also be attributed to the vaccine. In response, Pfizer started laying off hundreds of employees.
Amid the decline in results, Pfizer’s share price is currently lower than when the epidemic broke out, and Moderna has lost about $100 billion in market capitalization over the past two years, as its profits have fallen as revenues have fallen. The development of vaccines against respiratory diseases is also not progressing well at Moderna, in September the development of the combined coronavirus-influenza vaccine and the human metapneumovirus and parainfluenza vaccines were stopped.
The drop in demand for coronavirus vaccines is hardly surprising and not necessarily bad news, as resources can be diverted to other research and development in the pharmaceutical industry, writes The Wall Street Journal in its opinion article.
Vaccines flattened the epidemic curve, but politicians also benefited from it, who were able to lift lockdowns and abolish the obligation to wear masks. However, by making vaccinations mandatory and marketing campaigns in favor of vaccination, they also had a negative effect, as the public became more distrustful of pharmaceutical manufacturers, precisely in an era when innovation is advancing at the speed of light in the sector. The journalist of The Wall Street Journal also complains that although cholesterol-lowering and anti-diabetic drugs can prevent heart attacks and serious complications, which are now considered public diseases, the US government does not launch advertising campaigns that would encourage the population to use Lipitor or Ozempic.
The coronavirus vaccines were only the first in a series of treatments using mRNA technology, the technology is also promising for the treatment of cancer and other chronic diseases. An article from The Wall Street Journal mentions the latest developments as an example gene therapies, which can cure lifelong hereditary diseases with single treatments. For example, next month the US FDA may approve two therapies that can reverse sickle cell disease – a disease that affects about 100,000 Americans. Meanwhile, Pfizer is working on a gene therapy that would help blood clotting in the bodies of people suffering from bleeding disorders, and Moderna melanoma vaccine is developing together with the American pharmaceutical manufacturer Merck, which would train the immune system to search for and destroy tumor cells. So far, the development seems to be successful, based on last year’s clinical trials, the vaccine reduced death or disease recurrence in this type of cancer by 44 percent. BioNTech in collaboration with Genentech a for pancreatic cancer is developing a vaccine that reduced the chance of relapse by 50 percent in the first tests.
Let’s not forget about the recent favorites of the stock market, that is about anti-obesity drugs neither, whose manufacturers are now led by Eli Lilly and Novo Nordisk, but among the developers of the coronavirus vaccine, Pfizer and AstraZeneca have also entered the race. The market is huge, as 70 percent of Americans are currently considered obese, and along with weight reduction, patients’ health can also improve. Tests that have been going on for years prove that the number of strokes, heart attacks and other cardiovascular deaths decreases in people who lose weight with the drug. For example, the drug Wegovy, launched by Novo Nordisk, reduced mortality by about 1 percent compared to the control group, according to clinical trials. Seeing the results, investors jumped on the story, the combined market capitalization of Novo Nordisk and Eli Lilly already reaches 900 billion dollars. But it is questionable how long the stock market euphoria will lastbecause strong market competition can sooner or later erode profits in a business sector that promises rapid growth potential.
Cover image source: Los Angeles Times via Getty Images