Pfizer (NYSE:PFE) announced today that its COVID-19 Vaccine will receive full FDA approval and become the latest in a long line of vaccinations and vaccines to receive that status. This is quite an accomplishment for this novel vaccine, which so far has been able to pass final clinical safety tests including those in humans in 2018.
Once fully commercialized and commercialized it will provide a great advantage to the healthcare providers and it will hopefully assist the pharmaceutical sector at large. Let’s take a look at the business case of the vaccine.
How is COVID-19 going to create profit for Pfizer?
It’s estimated that around 57 million children worldwide will be infected with polio-like illnesses at some point in their lives. In addition, that number will be 6.3 million adults.
However, the total number of these infections won’t be nearly as great in US. In the US the number of infections is around 5 million per year.
So the vaccine has been designed to achieve a prevalence of around 2.5 million infections, a number that is more manageable for the commercialization of COVID-19.
The vaccine has already been implemented in some trials and those tests showed it to be effective and safe at the doses provided in the previous trials. The decision to go with the higher dose came after that result was published.
The vaccine works by preventing transmission of paralytic encephalitis, the main causative agent of polio. Though the vaccine has only been commercialized for a couple of years and there has yet to be data from one major indication, and it will be difficult to gain traction in new markets until it is proven to be effective. However, the vaccine is designed to be delivered in 3 doses over 3 years. So the company is also looking for profitable ways to extend the period of good behavior for its vaccine.
The 3-dose schedule has been suggested to do the work, as that is what studies have shown from other vaccines that have been proven effective at the doses required.
What about profitability?
Approval from the US FDA comes as a big boost for this business and there are chances that it will see a revenue volume of more than $1bn a year. For years, it’s been seen how the pharmaceutical industry has been able to generate substantial revenues with vaccines. However, there are definitely risks involved when using a vaccine as a commercialization strategy. The vaccine is effectively a single dose and studies are being conducted on future doses. That’s right, COVID-19 is being developed as a vaccine.
So there are also risks when it comes to safety. Remember that the vaccine won’t be proven effective unless it has a positive long-term effect on the disease that has been studied. It could be important to delay the process if there are issues. The fact that the vaccine is from Pfizer, and that it is available in more than 40 countries already, won’t hurt anything either.
Pfizer’s drug could offer some big advantages for healthcare providers, particularly in developing markets. Already the company has helped in the identification of around 3.5 million children that were potential targets for the vaccine. It’s also been able to provide the vaccine to 617 children with contracted paralysis in clinical trials, so the condition will be easy to administer for providers.
The timing of this approval, also is extremely important as it would assist with in addressing the global health crisis of paralytic encephalitis.
Disclosure: No positions.