There’s Room for More Players in the Covid-19 Vaccine Market, Analyst Says – Barron’s

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As expectations grow that messenger RNA-based vaccines such as those developed by Pfizer and Moderna will dominate the Covid-19 vaccine market, analysts say there will be room for smaller players alongside those two firms.

In a note published early Monday, an analyst at Guggenheim Securities initiated coverage of CureVac (ticker: CVAC), which is developing an mRNA-based Covid-19 vaccine now in clinical trials, with a Neutral rating and no target price.

Shares of CureVac, which went public in August, have skyrocketed in recent months. The stock is up 43.5% so far this year and is up another 1.7% to about $118 in trading on Monday.

In less than 12 months from its IPO, we believe CVAC has the potential to evolve from a research driven mRNA company to a fully integrated biopharma vaccine manufacturer and developer, assuming [its Covid-19 vaccine] succeeds in preventing symptomatic COVID-19 disease in its upcoming Phase 2/3 HERALD study, Guggenheim analyst Seamus Fernandez wrote.

Messenger RNA-based vaccines are based on a novel technology that had not been used in an approved or authorized medicine of any kind before the Pfizer vaccine received U.S. Food and Drug Administration authorization late last year. They work differently than the adenoviral vector-based vaccines developed by Johnson & Johnson (JNJ) and AstraZeneca (AZN), which also use a novel approach. Johnson & Johnson and AstraZeneca have both faced manufacturing troubles and safety concerns, though regulators say the benefits of the vaccines continue to outweigh the risks.

In his note, Fernandez wrote that he expects CureVac to claim a modest share of pandemic-era sales of the Covid-19 vaccine in developed world markets.But he said that he thinks the vaccine can capture 20% of global endemic sales by or before 2024.

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We think demand for SARS-CoV-2 vaccines is here to stay and mRNA vaccines will dominate the global landscape long-term, he wrote.

Fernandez estimated annual sales of between $3 billion and $3.5 billion of CureVacs Covid-19 vaccine after the pandemic, and that mRNA-based vaccines will have 65% of the Covid-19 vaccine market share in 2021 and 2022.

According to FactSet, the analyst consensus puts Modernas (MRNA) Covid-19 vaccine sales at $8.5 billion in 2025 and BioNTech s (BNTX) at $3.8 billion.

Longer-term, we see opportunity for CVAC to gain share based on its pricing discount relative to PFE/BNTX and MRNA, Fernandez wrote.

In addition to its Covid-19 vaccine, the company has a pipeline of prophylactic vaccines and cancer vaccines. The company also has a number of partnerships with GlaxoSmithKline (GSK), including a collaboration on a next-generation Covid-19 vaccine.

With >$1B in cash on the balance sheet, CVAC is well funded, but the pipeline is too early (or speculative in the case of intratumoral cancer vaccines) to attribute significant value, Fernandez wrote.

For now, the stocks valuation hinges on the outcome of the ongoing Phase 2b/3 study of its Covid-19 vaccine. Fernandez wrote that he expects the vaccine to demonstrate efficacy of at least 80%.

Write to Josh Nathan-Kazis at josh.nathan-kazis@barrons.com

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There's Room for More Players in the Covid-19 Vaccine Market, Analyst Says - Barron's