COVID-19 vaccine makers are shifting gears and planning for a smaller, more competitive booster shot market after delivering doses as fast as they could over the last 18 months.
Executives at the biggest COVID vaccine makers, including Pfizer and Moderna, said they believe most people who wanted to get vaccinated against COVID have already done so — more than five billion people worldwide.
In the coming year, most COVID vaccinations will be booster shots, or first inoculations for children, which are still gaining regulatory approvals around the world, they said.
Pfizer, which makes its shot with Germany's BioNTech, and Moderna still see a major role for themselves in the vaccine market even as overall demand declines.
Upstart U.S. vaccine maker Novavax and Germany's CureVac, which is working with GlaxoSmithKline, are developing vaccines they hope to target at the booster market.
The roles of AstraZeneca and Johnson & Johnson, whose shots have been less popular or effective, are expected to decline in this market.
"It becomes a very competitive game with companies battling it out with pricing and for market share, even for vaccines that are considered to be the best, like Pfizer and Moderna," said Hartaj Singh, an analyst at investment bank Oppenheimer & Co.
Demand likely to come from 'already vaccinated'
It is not known yet how many booster doses will be needed. Second booster shots are currently recommended in some countries for only a subset of the population.
It is also unclear if vaccine makers will sell a redesigned shot this fall and each fall afterward, as flu vaccine makers do to match circulating strains, and what impact that might have on waning demand.
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Pfizer chief executive Albert Bourla said in an interview that adults who are still unvaccinated are unlikely to seek out shots now, more than two years into the pandemic.
It will be the "already vaccinated" who account for demand, Bourla said.
Moderna executives recently said those who would benefit from annual boosting include people over 50 and adults with other risk factors or high-risk occupations, including health-care workers.
Moderna CEO Stephane Bancel estimated this population to be around 1.7 billion people, or about 21 per cent of the global population.
Moderna and Pfizer/BioNTech, which make messenger RNA vaccines that can be updated somewhat quicker than those from competitors, said they are developing vaccines targeting the Omicron variant of the virus.
The United States and Western Europe — where about 600 million people are vaccinated — will remain important markets, but sales may be a fraction of what they have been, said Tyler Van Buren, an analyst at investment bank Cowen.
Van Buren said the people who will continue to seek out regular boosters are those at high risk of exposure and severe outcomes due to underlying medical conditions, which he believes accounts for 20 to 25 per cent of the population.
That would be significantly less than the roughly 49 per cent of adults in the U.S. and 62 per cent of adults in Europe who have received at least one booster so far, a total of about 335 million people.
Analysts have forecast revenue of over $17 billion US for the Pfizer/BioNTech shot and $10 billion for Moderna's in 2023, about half of the $34 billion and $23 billion they expect this year, respectively. Sales are expected to drop further from there.