FDA Gives Full Approval to Pfizer COVID-19 Vaccine

Pfizer/BioNTech's COVID-19 vaccine, Comirnaty, received full approval from the U.S. Food and Drug Administration on Aug. 23 for individuals age 16 and older. We're maintaining our Pfizer PFE and BioNTech BNTX fair value estimates. We continue to see sales reaching $35 billion in 2021 and $39 billion in 2022, followed by roughly $2 billion in annual sales beyond 2022 as we expect postpandemic annual COVID vaccines for only the most vulnerable (infants and seniors). The mRNA technology that formed the basis of the vaccine provides support to Pfizer's established wide moat and also contributes to BioNTech's positive moat trend.

Government contracts for the initial two-dose series and boosters drive our valuations; we think established contracts are more than sufficient to cover any increased demand. We do think demand for these purchased vaccines could increase with full approval, which could help to end the most recent surge driven by the delta variant. The FDA completed the review in just over three months and has now reviewed six-month safety data from thousands of patients in the phase 3 trial. This could encourage some individuals who were uncertain about the long-term safety of the vaccine to get vaccinated. We also expect this approval to give more leverage to public and private organizations wishing to mandate vaccination, including universities and hospitals.

In the U.S., roughly 60% of the vaccine-eligible population (age 12 and older) has been fully vaccinated. President Joe Biden's target for a return to near normal by July 4 was thwarted by a combination of vaccine hesitancy, waning efficacy of vaccines, and the rise of the more contagious delta variant. Herd immunity could still be achievable, but the delta variant raises the bar; it therefore could depend on new mandates or increased willingness to vaccinate following Pfizer's Aug. 23 full approval, uptake of third-dose booster shots, and the potential rise of vaccine-resistant variants down the line.

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