Although the COVID-19 pandemic ended up being a cash cow for several pharma and biotech companies, many of them are seeking other treatments to focus on to replace revenue that is beginning to fade away.
With their mRNA vaccines, Moderna (NASDAQ:MRNA), Pfizer (NYSE:PFE), and BioNTech (BNTX) were amongst the biggest beneficiaries, revenue wise, because of the pandemic.
Including Johnson & Johnson (NYSE:JNJ), AstraZeneca (NASDAQ:AZN), and Regeneron Pharmaceuticals (REGN), the six companies have brought in revenue of more than $163B from COVID-related products since December 2020, according to the Economist Intelligence Unit (EIU).
A recent EIU report highlights a scenario that many pharmas and biotechs have seen coming — a looming revenue cliff for COVID vaccines and drugs.
These companies have two options. They can either stay the course on their COVID portfolios or move away and focus on other therapeutics areas. No matter what their decision, the EIC said the results could be a restructuring, spin-off deals, layoffs, or acquisitions.
While peak sales of COVID vaccines are likely in the past, Pfizer (PFE) and Moderna (MRNA), makers of the mRNA vaccines, as well as AstraZeneca (AZN) are better positioned to continue to profit from COVID shots in coming years.
At least in the US, it remains to be seen how continued uptake of COVID vaccines will be once the public health emergency is lifted in May and the vaccines hit the commercial market. There is also a question of how many people will get future vaccine boosters as many Americans have grown weary of the virus, a term known as “COVID fatigue.”
In its latest earnings report in January, Pfizer (PFE) said it sees revenues of Comirnaty, its COVID vaccine, this year of ~$13.5B, down 64% from 2022. For its COVID antiviral Paxlovid, it sees a 58% year-over-year drop to ~$8B.
Perhaps as an indication of the writing on the wall, Pfizer (PFE) and AstraZeneca (AZN) are looking to boost their top lines outside of COVID. In its January earnings call, Pfizer (PFE) CEO Albert Bourla said 2023 would see the largest number of product launches in the drugmaker’s history.
AstraZeneca (AZN) CEO Pascal Soirot said that the UK pharma would begin more than 30 phase 3 trials in 2023, 10 of which have the potential for US peak sales of more than $1B, according to EIC.
J&J (JNJ), meanwhile, is looking to potential approvals of therapies for cancer, HIV, and multiple myeloma to offset declines in COVID revenues.
One area that could see further growth is the use of mRNA technology in other therapeutic areas. Moderna (MRNA), for example, is spending $4.5B on R&D this year, compared to $3.3B in 2022. And in February, BioNTech (BNTX) said it would invest 40M Euros on a new building for manufacturing mRNA and cell-based drugs.
Future mRNA treatments could be used for infectious diseases and cancer, among other areas, based on Moderna’s (MRNA) and BioNTech’s (BNTX) pipelines.