Covid-19 Vaccine and Drug Sales, Once Booming, Plateau

Analysts, meantime, are lowering sales estimates for Covid-19 drugs such as

Pfizer Inc.’s

antiviral Paxlovid, citing softening demand and few new supply deals.

The situation marks a new phase in the pandemic, according to analysts, one without the record sales that certain companies such as Pfizer and

Moderna Inc.

notched just a few months ago.

“This year is probably the peak, then going forward, it’s going to decline,” said Cantor Fitzgerald LP analyst

Louise Chen.

“The question is how much?”

Among the factors, analysts say, is slowing demand amid sufficient supplies in many countries.

Drug-sales forecasts have dropped partly because vaccinations have helped many people avoid the kinds of illness necessitating drug treatment. In addition, a mutating virus has rendered some drugs obsolete.

Meantime, vaccine sales have slowed now that many governments, which had competed for vaccine contracts to lock in supplies while manufacturers ramped up production, don’t need as much with many people vaccinated.

People are also getting boosters at lower rates than they received initial doses, further reducing demand.

Many countries have even refrained from entering into new supply contracts with manufacturers, while they wait to see how often people will need booster shots and whether the shots should be tailored for specific variants.

In the U.S., the Biden administration hasn’t been able to win from Congress to date a request for $22.5 billion in new Covid-19 funding, which would pay for new vaccine contracts.

“The revenue stream was going to go away at some point; it’s just going away a little faster—certainly faster than what companies were saying,” said

Vamil Divan,

an analyst at

Mizuho Financial Group Inc.

Sales could still exceed expectations if governments begin signing new contracts, severe illnesses pick up or new vaccines are needed, according to analysts.

Forecasts could also increase if the U.S. government, which has been paying for pandemic products, shifts reimbursement to the private sector, which could fetch higher prices.

Analysts say that predicting sales for Covid-19 vaccines and drugs can be especially difficult right now because of uncertainty around how much the medicines will be used in the future, including whether they will be used as much as treatments for managing the flu.

“It’s really challenging to predict what demand will look like or how people’s behavior will change as this virus continues to evolve,” said

Carter Gould,

an analyst at

Barclays

PLC.

Some companies are sticking with their forecasts.

Moderna hasn’t adjusted the $21 billion in yearly sales for the company’s Covid-19 vaccine since raising the estimate in March, though it says sales could wind up higher or lower depending on what the World Health Organization-backed Covax facility and the U.S. government do.

Likewise, Pfizer hasn’t changed its forecasts for $22 billion in Paxlovid and $32 billion in vaccine sales for 2022.

JPMorgan Chase

& Co. and Barclays, however, have cut their estimates for Pfizer’s Paxlovid sales this year, projecting use will lighten and governments won’t sign as many new contracts.

JPMorgan trimmed its Paxlovid forecast by about $5 billion to $28 billion this year. Barclays cut its 2023 Paxlovid sales estimate to $9.5 billion from $10 billion, and the vaccine forecast to $20 billion from $23.3 billion.

Pfizer’s guidance was based on contracts signed or committed to at the time, and might be updated at the next earnings call, a company spokeswoman said. Pfizer expects demand for Paxlovid to increase as governments replenish their supplies.

Eli Lilly

& Co.’s widely used Covid-19 antibody cocktail ended up being used less than expected when the treatment no longer worked against the mutating virus.

Lilly’s combination of bamlanivimab and etesevimab generated $2.2 billion in sales last year, before the U.S. government restricted administration of the drug in January because it lost effectiveness against Omicron.

Lilly returned to the pandemic market, though, introducing a new antibody, bebtelovimab, which works against Omicron.

The drugmaker has declined to forecast sales for the drug for the rest of the year, however, because of the pandemic’s unpredictability and uncertainty over whether the U.S. will buy more, a company spokeswoman said.

GlaxoSmithKline

PLC doesn’t expect new supply contracts this year for the antibody treatment sotrovimab that it developed with partner

Vir Biotechnology Inc.

In March, the Food and Drug Administration restricted the drug’s use after testing found it to be ineffective against BA.2, now the dominant form of Omicron.

The companies are confident in the drug’s long-term role in the pandemic, a Glaxo spokeswoman said.

Merck lowered its yearly sales guidance for the antiviral pill Lagevrio by $500 million, to between $5 billion and $5.5 billion, because the company was working through its agreements with countries, Merck Chief Executive

Rob Davis

said.

The drug, also known as molnupiravir, “obviously slowed in its growth because the waves of Covid have slowed,” he said.

Lagevrio, which Merck sells with partner Ridgeback Biotherapeutics LP, had $3.2 billion in sales during the first quarter. Merck expects half of the drug’s remaining sales this year will take place before July.

“What we’re simply seeing is governments haven’t been contracting yet for a fall wave,” said

Daina Graybosch,

an analyst at

SVB Securities

LLC.

In April, J&J withdrew its guidance of $3 billion in sales this year for its Covid-19 vaccine, citing a global surplus of vaccine doses and uncertain demand.

J&J set the vaccine at a not-for-profit price, and decided “it was confusing for investors to not focus on what drives value” for shareholders in other products, Chief Financial Officer

Joseph Wolk

said.

Analysts expect the vaccine to fetch $495 million in sales this year, according to FactSet, down from the $2.4 billion generated last year.

This month, the FDA restricted use of the vaccine to a narrow set of people, citing the risk of a blood-clotting condition.

Other countries including South Africa are sticking with the J&J shot, however, and could return for future contracts. And the WHO has kept its recommendation for use, a spokesman said.

A J&J spokesman said the company’s vaccine is playing a crucial role fighting the pandemic, and the company is trying to make supplies available where people are most in need.

—Peter Loftus contributed to this article.

Corrections & Amplifications
Pfizer is forecasting $22 billion for Paxlovid and $32 billion in vaccine sales for 2022. An earlier version of this article incorrectly said Pfizer was forecasting $32 billion for Paxlovid and $22 billion in vaccine sales this year. (Corrected on May 24)

Write to Jared S. Hopkins at [email protected]

Analysts, meantime, are lowering sales estimates for Covid-19 drugs such as

Pfizer Inc.’s

antiviral Paxlovid, citing softening demand and few new supply deals.

The situation marks a new phase in the pandemic, according to analysts, one without the record sales that certain companies such as Pfizer and

Moderna Inc.

notched just a few months ago.

“This year is probably the peak, then going forward, it’s going to decline,” said Cantor Fitzgerald LP analyst

Louise Chen.

“The question is how much?”

Among the factors, analysts say, is slowing demand amid sufficient supplies in many countries.

Drug-sales forecasts have dropped partly because vaccinations have helped many people avoid the kinds of illness necessitating drug treatment. In addition, a mutating virus has rendered some drugs obsolete.

Meantime, vaccine sales have slowed now that many governments, which had competed for vaccine contracts to lock in supplies while manufacturers ramped up production, don’t need as much with many people vaccinated.

People are also getting boosters at lower rates than they received initial doses, further reducing demand.

Many countries have even refrained from entering into new supply contracts with manufacturers, while they wait to see how often people will need booster shots and whether the shots should be tailored for specific variants.

In the U.S., the Biden administration hasn’t been able to win from Congress to date a request for $22.5 billion in new Covid-19 funding, which would pay for new vaccine contracts.

“The revenue stream was going to go away at some point; it’s just going away a little faster—certainly faster than what companies were saying,” said

Vamil Divan,

an analyst at

Mizuho Financial Group Inc.

Sales could still exceed expectations if governments begin signing new contracts, severe illnesses pick up or new vaccines are needed, according to analysts.

Forecasts could also increase if the U.S. government, which has been paying for pandemic products, shifts reimbursement to the private sector, which could fetch higher prices.

Analysts say that predicting sales for Covid-19 vaccines and drugs can be especially difficult right now because of uncertainty around how much the medicines will be used in the future, including whether they will be used as much as treatments for managing the flu.

“It’s really challenging to predict what demand will look like or how people’s behavior will change as this virus continues to evolve,” said

Carter Gould,

an analyst at

Barclays

PLC.

Some companies are sticking with their forecasts.

Moderna hasn’t adjusted the $21 billion in yearly sales for the company’s Covid-19 vaccine since raising the estimate in March, though it says sales could wind up higher or lower depending on what the World Health Organization-backed Covax facility and the U.S. government do.

Likewise, Pfizer hasn’t changed its forecasts for $22 billion in Paxlovid and $32 billion in vaccine sales for 2022.

JPMorgan Chase

& Co. and Barclays, however, have cut their estimates for Pfizer’s Paxlovid sales this year, projecting use will lighten and governments won’t sign as many new contracts.

JPMorgan trimmed its Paxlovid forecast by about $5 billion to $28 billion this year. Barclays cut its 2023 Paxlovid sales estimate to $9.5 billion from $10 billion, and the vaccine forecast to $20 billion from $23.3 billion.

Pfizer’s guidance was based on contracts signed or committed to at the time, and might be updated at the next earnings call, a company spokeswoman said. Pfizer expects demand for Paxlovid to increase as governments replenish their supplies.

Eli Lilly

& Co.’s widely used Covid-19 antibody cocktail ended up being used less than expected when the treatment no longer worked against the mutating virus.

Lilly’s combination of bamlanivimab and etesevimab generated $2.2 billion in sales last year, before the U.S. government restricted administration of the drug in January because it lost effectiveness against Omicron.

Lilly returned to the pandemic market, though, introducing a new antibody, bebtelovimab, which works against Omicron.

The drugmaker has declined to forecast sales for the drug for the rest of the year, however, because of the pandemic’s unpredictability and uncertainty over whether the U.S. will buy more, a company spokeswoman said.

GlaxoSmithKline

PLC doesn’t expect new supply contracts this year for the antibody treatment sotrovimab that it developed with partner

Vir Biotechnology Inc.

In March, the Food and Drug Administration restricted the drug’s use after testing found it to be ineffective against BA.2, now the dominant form of Omicron.

The companies are confident in the drug’s long-term role in the pandemic, a Glaxo spokeswoman said.

Merck lowered its yearly sales guidance for the antiviral pill Lagevrio by $500 million, to between $5 billion and $5.5 billion, because the company was working through its agreements with countries, Merck Chief Executive

Rob Davis

said.

The drug, also known as molnupiravir, “obviously slowed in its growth because the waves of Covid have slowed,” he said.

Lagevrio, which Merck sells with partner Ridgeback Biotherapeutics LP, had $3.2 billion in sales during the first quarter. Merck expects half of the drug’s remaining sales this year will take place before July.

“What we’re simply seeing is governments haven’t been contracting yet for a fall wave,” said

Daina Graybosch,

an analyst at

SVB Securities

LLC.

In April, J&J withdrew its guidance of $3 billion in sales this year for its Covid-19 vaccine, citing a global surplus of vaccine doses and uncertain demand.

J&J set the vaccine at a not-for-profit price, and decided “it was confusing for investors to not focus on what drives value” for shareholders in other products, Chief Financial Officer

Joseph Wolk

said.

Analysts expect the vaccine to fetch $495 million in sales this year, according to FactSet, down from the $2.4 billion generated last year.

This month, the FDA restricted use of the vaccine to a narrow set of people, citing the risk of a blood-clotting condition.

Other countries including South Africa are sticking with the J&J shot, however, and could return for future contracts. And the WHO has kept its recommendation for use, a spokesman said.

A J&J spokesman said the company’s vaccine is playing a crucial role fighting the pandemic, and the company is trying to make supplies available where people are most in need.

—Peter Loftus contributed to this article.

Corrections & Amplifications
Pfizer is forecasting $22 billion for Paxlovid and $32 billion in vaccine sales for 2022. An earlier version of this article incorrectly said Pfizer was forecasting $32 billion for Paxlovid and $22 billion in vaccine sales this year. (Corrected on May 24)

Write to Jared S. Hopkins at [email protected]