As of yet, there is no approved vaccine to protect people from the novel coronavirus. But Moderna appears to have a leg up on the many drugmakers and biotech companies working to develop one. Cambridge, Massachusetts-based companyModerna executives have expressed confidence that the company’s vaccine – said to be the company’s first commercial product – will be available for release by the end of the year. of his vaccine at the end of July, following the promising results of a first test at the beginning of the summer.
European drug makers Sanofi and GlaxoSmithKlinelast week with the US government to produce 100 million doses for about $ 10.50 each, according to calculations by analyst Mani Foroohar of brokerage firm SVB Leerink. U.S. pharmaceutical giant Pfizer, which is also working on a coronavirus vaccine, said it would initially set its treatment at $ 19.50 per dose.
In a conference call with analysts on Wednesday, executives at Moderna said they charge between $ 32 and $ 37 for initial doses of its vaccine, which are given in trials or stored for later use. That’s almost 90% more than what Pfizer charges and triple the cost of the Sanofi-GSK vaccine.
“We are working with governments around the world, and our own, to ensure that the vaccine is accessible regardless of our ability to pay,” Moderna said.said in the call. “And we will be responsible for the price, well below the value, during the pandemic. ”
Moderna did not respond to a request for comment.
Moderna received nearly $ 1 billion in federal funding to develop and produce his vaccine, and he hedged himself on the question of what profit he would seek out of a treatment for the disease that has killed nearly 158,000 people in the states. -United.
While a number of its rivals pledged to forgo profits on their vaccines at a congressional hearing last month, Moderna was unwilling to make the same pledge. “We will not sell it at cost,” Moderna President Dr Stephen Hodge told the hearing.
It is still unclear how much money Moderna would make from its vaccine if it was proven effective and approved by US regulators. One factor that could affect prices is that Moderna faces potentially higher production costs than large companies.
“The cost of manufacture may vary, and [Moderna] is a small company and therefore may not be as large as Pfizer, ”said analyst Michael Yee, who follows Moderna for brokerage firm Jefferies. The prospect of higher manufacturing costs could be one of the reasons Moderna’s experimental vaccine costs more than other current remedies, he added.
Based on the high-end price of $ 37 for its vaccine, Moderna’s current contract with the government is to produce only around 11 million doses. This is a much smaller stock than what is called for in US agreements with other companies. Moderna said it will likely charge less per dose as its production increases and receives larger orders.
SVB Leerink’s Foroohar expressed doubts that Moderna could continue to price its vaccine so much higher than competing products. “Pharmaceutical companies are talking about being able to produce up to 6.5 billion doses of vaccine by the end of next year,” he said. “With this supply, it is not reasonable to expect Moderna to be able to pursue a higher price on a large scale. ”
Stock analysts at independent research firm Trefis have estimated Moderna’s operating margins to be around 14.5% and that it will be able to produce up to 800 million doses per year by the end. of 2021. Assuming the company can continue to charge at least $ 30 per dose, Moderna could make annual profits of around $ 3.5 billion as long as the virus remains a threat.
But that’s if everything goes as planned. “For a company that has never had a product before, this is a very public launch,” Foroohar said. “The execution bar and the ability bar are unique and stiff, but of course the scale of the opportunity is also unique. “