In the race for a coronavirus vaccine, can there be multiple winners?

Demand says we may need several players crossing the finish line.

| More on:
Blue gloved hands holding up vials with covid vaccine labels

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

Everyone is wondering which company will win the race to produce a coronavirus vaccine. With 31 candidates in clinical development and six of those in phase 3 studies, competition is high.

That's if we expect only one winner. But the fact is, one winner likely won't be sufficient, a fact that becomes clear when we consider the number of people who need the vaccine and the manufacturing capacity of any single company. Let's take a look at some of the numbers and what all of this means for those in the vaccine race, as well as investors.

To stop the coronavirus from spreading, the goal is to reach herd immunity. That's when most of the population is immune to an illness, halting the spread. Experts have said 70% of the population must be immune to the coronavirus to reach that point. With the world's population totalling 7.7 billion, about 5.4 billion people will need vaccination.

Now, let's see where leaders in the race stand in terms of supplying a possible vaccine. The following are all involved in phase 3 or phase 2/3 trials. Moderna (NASDAQ: MRNA) is set to deliver 500 million doses annually, with the possibility of increasing that to 1 billion as of next year. AstraZeneca (NYSE: AZN) says its manufacturing capacity is 3 billion doses. Pfizer (NYSE: PFE) and its partner BioNTech (NASDAQ: BNTX) aim to produce more than 1.3 billion doses by the end of 2021.

Does supply meet demand?

Before calculating whether supply meets demand, keep in mind that certain vaccines involve two doses. That's the case for Moderna's program and the Pfizer/BioNTech team. Though AstraZeneca tested its vaccine in both one- and two-dose treatments, researchers said the strongest immune response was seen in the two-dose group. So, when regulators approve any vaccine, its number of doses will affect how much supply is needed for a population.

And even if all three vaccine candidates mentioned above gain approval, supply will still fall short of demand, regardless of a one- or two-dose schedule -- at least considering today's manufacturing capacity. That's probably one reason why countries have been scrambling to pre-order vaccines from more than one company.

For example, the U.S. has pre-ordered doses of potential vaccine candidates under development by Moderna, AstraZeneca, Pfizer/BioNTech, and others. Through a $1.5 billion investment this month, the U.S. ordered 100 million doses from Moderna; it has offered $1.2 billion to AstraZeneca for 300 million doses; and for a $1.95 billion investment in Pfizer/BioNTech's program, the U.S. will own 100 million doses. Europe and the U.K. have also signed supply agreements with vaccine developers.

Making extra sure they're ready

All this willingness to order vaccines from several producers might also be a case of countries hedging their bets. If one company's program fails, at least there's a chance of obtaining a vaccine elsewhere. But knowing the supply problem that lies ahead -- even if a few vaccine candidates are approved -- it's likely governments will have to seek doses from several vaccine makers well into the future, and they know that.

Pricing is another concern, and prices so far have varied. For instance, the U.S. is paying $10 a dose for 100 million doses of Johnson & Johnson's (NYSE: JNJ) investigational vaccine. And Moderna has recorded some small volume orders in the range of $32 to $37 a dose. It's too early to say whether lower-priced vaccines will have an edge. Supply and product quality will determine that further down the road.

Crossing the finish line

So, to answer our question: Yes, there is room for more than one winner in this vaccine race. But these winners may not all cross the finish line at the same time. The one that does, though, is likely to see its shares climb. Companies that are ahead from a timeline perspective -- such as Moderna, AstraZeneca, and Pfizer/BioNTech -- stand a good chance if the data cooperate.

And then there may be a later winner (or winners): a biotech or pharmaceutical company whose vaccine candidate is in phase 1 or 2 studies today. If that player's potential vaccine eventually performs well, revenue and share gains will be on the horizon.

The key point to keep in mind here, regarding the companies close to the finish line and those further behind, is this: Clinical trial results will be the first benchmark to determine the winners of this race. So, if you're looking to get an edge on who will dominate the market, be on the lookout for clinical trial reports this fall.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

Adria Cimino has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on International Stock News

A woman is excited as she reads the latest rumour on her phone.
Broker Notes

Goldman Sachs says this US stock is replacing Tesla in the Magnificent Seven

And no, it's not a tech company. It's in the healthcare sector.

Read more »

A man looking at his laptop and thinking.
Share Gainers

Should I buy Nvidia stock as an Australian investor?

Many Aussies are thinking of jumping on the bandwagon, but they need to think about these issues first.

Read more »

Digital rocket on a laptop.
Broker Notes

Is the Nvidia share price on course to reach US$1,400?

You betcha, says one analyst.

Read more »

A woman holds a soldering tool as she sits in front of a computer screen while working on the manufacturing of technology equipment in a laboratory environment.
International Stock News

Could Nvidia become the most valuable stock on earth?

Can anything stop the Nvidia stock price?

Read more »

A group of young ASX investors sitting around a laptop with an older lady standing behind them explaining how investing works.
International Stock News

What can ASX investors learn from Warren Buffett's latest buys and sells?

We've just found out what Buffett's been buying and selling recently.

Read more »

electric vehicle such as Tesla being charged at charging station
International Stock News

Why Tesla stock tanked in January

Will the electric vehicle leader see earnings decline once again in 2024?

Read more »

A woman sits at her computer with her hand to her mouth and a contemplative smile on her face as she reads about the performance of Allkem shares on her computer
International Stock News

Will Nvidia stock be worth more than Microsoft by 2030?

The graphics giant has been growing at a much faster pace than Microsoft, but can it sustain that momentum?

Read more »

Man with hands in the middle of two items with money bags on them.
International Stock News

Stock-split watch: Is Tesla next?

Stock splits are fun. But how much substance there is in Tesla splitting its stock is debatable.

Read more »