Covid-19: How the fate of pharma companies is changing as world demand for vaccines falls

The Covid-19 pandemic caused seismic shifts in the pharmaceutical landscape, with vaccine stalwarts like Sanofi, GSK and Merck making way for other drug manufacturers such as Pfizer, Moderna and BioNTech.

These companies rapidly stepped up to produce and distribute life-saving vaccines during the crisis.

However, as the world tries to leave the pandemic behind, vaccine sales have dwindled, prompting a closer look at how major producers are adapting.

While the big players are coming up with revised variants of the vaccine, smaller players have either ceased Covid vaccine production or wrapped up their business.

Here, The National looks at some of the Covid-19 vaccine producers and explores how they are grappling with the changing pandemic landscape.

BioNTech

German biotechnology company BioNTech has slashed its drug development budget for 2023 after reporting a net loss and a 95 per cent annual drop in revenues in the June quarter.

The company’s revenue, which was hurt by a fall in pandemic-related demand, was €167.7 million ($184.03 million), while it reported a net loss of €190.4 million in the April-June period.

It has also reduced its research and development budget for this year to between €2 billion and €2.2 billion, from between €2.4 billion and €2.6 billion previously.

BioNTech is now aiming to launch Omicron XBB1.5-adapted monovalent Covid-19 vaccine in September as recommended by the US Food and Drug Administration (FDA) and European Medicines Agency.

It has predicted a Covid-19 vaccine revenue of nearly €5 billion in 2023.

The company’s stock, which has dropped 33.5 per cent in the past year, was trading at $105.46 a share on Thursday at market close. The company’s market capitalisation was $25.41 billion.

Pfizer

Pharmaceutical major Pfizer reported a 77 per cent annual drop in its second-quarter profit, as sales of its Covid-19 products declined. Net income in the three months to the end of June declined to $2.33 billion. Revenue dropped 54 per cent to $12.73 billion.

The Covid vaccine's contribution to the company's revenue was down 83 per cent on an annual basis to $1.49 billion. The Covid antiviral pill Paxlovid reported a 98 per cent drop in revenue to $143 million.

Paxlovid is a treatment for Covid-19 patients, but it does not prevent infection.

The New York-based company has predicted $13.5 billion in Covid vaccine sales and $8 billion in revenue for Paxlovid for the current fiscal period.

Pfizer's stock, which has dropped more than 26 per cent in the past year, was trading at $35.72 a share on Thursday, while market capitalisation was $201.65 billion.

Johnson & Johnson

Johnson & Johnson’s pharmaceutical business, which developed the Covid-19 vaccine, accounted for nearly 54 per cent of the company's overall sales in the period April to June.

The division added about $13.7 billion, 3.1 per cent more year on year, to total sales in the quarter. However, the quarterly earnings did not include any US sales from J&J’s Covid vaccine.

In April, the company said it expected no revenue in the US market after the first quarter because its commitments under government contracts were completed.

However, the shot added $285 million in international revenue in the last quarter.

The company’s stock, which has surged 3.01 per cent in the past year, was trading at $172.17 a share on Thursday and market capitalisation stood at $449.8 billion.

In the first three months of the year, the company’s Covid-19 vaccine-related costs jumped to $447.46 billion.

Moderna

Moderna’s sales of its Covid shots dropped more than 90 per cent in the second quarter.

The Massachusetts-based company predicts Covid shots revenue to hover in the range of $6 billion to $8 billion this year, up from its previous forecast of $5 billion. This is driven by the potential demand of 50 million to 100 million doses in the US market in the fourth quarter of this year.

The company is also pinning high hopes on its revised Covid vaccine for the omicron subvariant XBB1.5 that is expected to be launched next month in the US after FDA approval.

Moderna earned revenue of $344 million in the April-June period, compared with $4.75 billion in the same period last year when Covid infections were higher. It reported a net loss of $1.38 billion in the previous quarter.

The company’s stock, which has dipped 41.63 per cent in the past year, was trading at $100.28 a share on Thursday. The company’s market capitalisation stood at $38.17 billion.

Novavax

Biotechnology company Novavax, which reported a net income of $58 million in the last quarter, from a net loss of $510.5 million in the same period last year, prepares to launch a new Covid vaccine in the US in the next quarter. The FDA is expected to decide on the new shot by the end of next month.

The company’s chief executive, John Jacobs, told CNBC this week that the company will make “most of the seasonal opportunity” of its new shot in the fourth quarter.

Last month, Novavax said it will receive $349.6 million from Canada to settle for the unused Covid doses that were earlier scheduled for delivery.

The company’s stock, which has dropped 80.94 per cent in the past year, was trading at $7.69 a share on Thursday. The company’s market capitalisation stood at $663.69 million.

Sinovac

Beijing company Sinovac Biotech received $515 million in investment from China’s Sino Biopharmaceutical in December 2020 to fund the new production facility for Covid-19 vaccine CoronaVac.

Last month, Sinovac teamed up with Indonesia’s Bio Farma to serve Indonesia's domestic vaccine market as well as the international market, Sinovac said in a statement.

CoronaVac has been approved for use in more than 60 countries and regions.

Covaxin

Covaxin is India's indigenous Covid-19 vaccine by Bharat Biotech that is developed in collaboration with the government-owned Indian Council of Medical Research – National Institute of Virology.

In March, the company reportedly said it had to destroy between 30 million and 40 million doses because they had expired.

“Our production timelines are very elongated. There is a three-to-six-month period of wait by the time the vaccine is manufactured and regulatory clearances come. We are not supplying Covaxin to any hospitals in India after its production stalled in the face of low demand,” the Times of India newspaper reported a Bharat Biotech official saying in April.

AstraZeneca

London-listed AstraZeneca is diversifying its offerings to stay competitive in the post-pandemic era.

Last year, it teamed up with Sheikh Khalifa Medical City hospital in Abu Dhabi to conduct a real-world evidence study on Evusheld, which is designed to help prevent patients with poor immune systems from contracting Covid-19.

In December, Abu Dhabi’s G42 Healthcare signed a pact with AstraZeneca to manufacture pharmaceutical products in the emirate.

Medicago

Last year, Health Canada approved Quebec-based pharmaceutical company Medicago's plant-based Covid-19 vaccine, Covifenz.

But in February this year, parent company Mitsubishi Chemical Group said it plans to shut down all operations of Medicago due to the “significant changes to the Covid-19 vaccine landscape and after a comprehensive review of the current global demand and market environment”.

Valneva and IDT Biologika

In September last year, French biotech company Valneva and German drug manufacturer IDT Biologika terminated their Covid-19 vaccine deal after the slowdown in pandemic cases.

Considering the reduced European Commission order, Valneva suspended manufacturing of the vaccine. As compensation, it agreed to pay IDT up to €36.2 million in cash and the equivalent of €4.5 million in the form of specified equipment purchased by Valneva, the company said in a statement.