Novak Djokovic may well have already surpassed his recent record-equalling 24th grand slam singles title if he had opted to take a Covid-19 jab and avoided bans at earlier tournaments due to his vaccination status. But the tennis gods clearly have a sense of mischief. Irony doesn’t begin to describe the fact that Moderna (US:MRNA) – one of the 'official corporate supporters' of the championship – sponsored ESPN's 'Shot of the Day' segment at the US Open.
The pharmaceutical and biotechnology group took its original decision to back the tournament as a means of raising awareness over the benefits of messenger RNA (mRNA) therapies beyond treating the coronavirus. The group’s evangelism on this front seems justified given a recent late-stage trial which showed that its influenza vaccine elicited a better immune antibody response than existing products on the market, and Moderna isn’t the only entity looking to exploit the seasonal nature of the illness.
It was well before Covid-19 was beginning to take hold, back in August 2018 that Pfizer (US:PFE) signed a collaboration agreement with Germany’s BioNTech (US:BNTX) to develop mRNA-based flu vaccines. One candidate is now at the phase three trial stage, the point at which an earlier version of Moderna’s alternative vaccine, dubbed mRNA-1010, failed to meet the clinical threshold necessary to declare interim success – as we all know, clinical trials tend to be convoluted affairs.
Nonetheless, it’s hard to ignore the prize on offer. According to projections from Allied Market Research, the global influenza vaccine market will be worth around $10.1bn (£8.1bn) by the end of the decade, representing a compound annual growth rate of 7.2 per cent from 2021 through to 2030.
For many people, the annual influenza jab is a matter of course. However, it remains to be seen whether the public will approach mRNA therapies in the same way. Pfizer’s chief executive, Albert Bourla, expects that 2023 will be a transitional year towards this end, as the commercial focus moves from a “pandemic model to normal procurement paradigms”. Among other things, this amounts to increased costs for the vaccine once US government support is pulled during autumn, although US citizens who have health insurance will still get the jabs for free due to requirements under the Affordable Care Act – ergo taxpayers are still on the hook.
The US recently approved new Covid-19 boosters from Pfizer-BioNTech is designed to target the Omicron XBB.1.5 subvariant, while the UK has authorised the use of a vaccine from Moderna targeted at the latest iteration of the virus. Health officials have separately expressed concerns over the new Sars-Cov-2 ‘Pirola’ variant due to the number of mutations to its spike protein – expect further scare stories on this basis.
All of this suggests that the commercial opportunity linked to coronaviruses is far from exhausted, although the removal of Covid-19 vaccine mandates for US federal employees has had the most profound impact on volumes. Share prices for Pfizer and Moderna have pulled back by 43 per cent and 74 per cent, respectively, since their peaks in the fourth quarter of 2021. Given the switch to Bourla’s corporate-babble “normal procurement paradigm”, it may be worth considering whether shares are now likely to start gaining again. The signs are not hopeful despite the recent success on the approvals front. There has been poor uptake in the US for the first updated Covid-19 shots from Pfizer and Moderna, while analysts continue to be pessimistic over volumes for their respective Comirnaty and SpikeVax products.
You get some idea of how the landscape has changed when you contrast Moderna’s cash margin of 71.9 per cent in 2021 with the negative 35.8 per cent consensus forecast for this year. It's worth adding that the negative technical signals for share price performance seen in the first half of 2023 have yet to reverse.
Another point worth taking on board is that both companies are facing federal lawsuits in the US over patent infringements related to mRNA technology – central to the developments of the vaccines – although these types of legal disputes are commonplace in the industry. Closer to home, a small group of patients are launching legal action against AstraZeneca (AZN) over an alleged blood-clotting side-effect of its Covid-19 vaccine. Manufacturers of the vaccines are effectively indemnified against legal action stateside under the FDA's Administration’s Emergency Use Authorization authority. In the UK, the British Medical Journal recently noted that NHS Business Services, which operates the domestic vaccine damage scheme, had received 4,017 claims relating to a Covid-19 vaccine as of early March. It’s safe to assume that Djokovic wasn’t one of the claimants.
