Pfizer/BioNTech Report 95% Efficacy Rate for Vaccine

Pfizer PFE and partner BioNTech BNTX reported strong final data from the phase 3 study with COVID-19 vaccine BNT162b2, supporting an efficacy rate of 95% (previously reported over 90% at interim analysis) with no major safety issues observed. We continue to project the vaccine’s probability of full approval at 90%, supporting sales projections of EUR 13 billion in 2021. We don’t expect any major changes to our fair value estimates for Pfizer or BioNTech. The relatively rapid development of the vaccine reinforces the innovative power behind Pfizer’s wide moat and BioNTech’s positive moat trend.

With strong efficacy and no major safety issues, we expect emergency authorization by early December following a Food and Drug Administration advisory committee meeting. We expect full approval in the first half of 2021 pending supportive final safety data. We believe the strong efficacy and low rates of adverse events bode well for approval and eventual utilization of the vaccine. The only grade 3 adverse events seen in frequency above 2% were fatigue (3.8%) and headache (2.0%), rates fairly similar to the general flu vaccine. Also, the large BNT162b2 study (over 40,000 patients) with a wide range of patient backgrounds (including age) should support widespread usage. We expect delivery challenges (BNT162b2 needs storage at -70 C ± 10 C) to be overcome with special-temperature shipping. Pfizer expects to produce 50 million doses in 2020 and up to 1.3 billion doses by the end of 2021; we expect all doses produced to sell out.

We expect strong COVID-19 vaccine competition from Moderna (already reported excellent efficacy data), Johnson & Johnson, AstraZeneca, Sanofi, GlaxoSmithKline, and many more, which will likely significantly stem the pandemic but also reduce the profitability of the market. We expect the vaccines' pricing power to be low with so many competitors, especially with several receiving government funding and stating a commitment to low vaccine pricing.

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