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How Much Can Companies Make From Coronavirus Vaccines? – Motley Fool

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Dec 3, 2020

In the near term, the ability of companies to make money selling their coronavirus vaccines will largely depend on contracts with governments. In this video from Motley Fool Live recorded on Nov. 23, Corinne Cardina, bureau chief of healthcare and cannabis, and Brian Orelli, Fool.com contributor, discuss the prices from the initial government contracts and a website from Duke University that tracks the contracts.

Corinne Cardina: Both Moderna (NASDAQ:MRNA) and Pfizer (NYSE:PFE) are charging the U.S. about $20 per dose. Of course, they require two doses, so $40 total to vaccinate a person. It is expected that the U.S. will make the vaccine available for free. Globally, the prices change a little bit. Moderna’s CEO has said the company will price it between $25 to $37 per dose depending on the amount ordered by other governments. Are either Pfizer or Moderna ahead in signing contracts with governments? Anything investors should know about how these contracts are structured?

Brian Orelli: Yes. So they both have contracts with the U.S. for 100 million doses, with options for more than that, because obviously a 100 million doses is only going to cover 50 million people. So Pfizer and BioNTech are getting paid 1.95 billion for those 100, so that’s 19.50 a dose. Moderna is only getting 1.525 billion, which works out to $15.25 a dose, so less. But Moderna got a lot of money from BARDA, which is the pandemic and other threats, and they got $955 million from that. So it kind of makes sense that they will get a discount, at least on the initial dose.

The EU has committed to buying 200 million doses with an option for another 100 million. Moderna is still in late stage talks with the EU, so we don’t know where they are at there, and then those are probably the two biggest ones. The next biggest one is for Japan, Pfizer has a slight edge there. Japan has committed to 120 million doses from Pfizer versus 50 million from Moderna, who’s working with Takeda (NYSE:TAK), which is a Japanese drugmaker.

Cardina: Great. I actually have an interesting tracker that I’m going to put in the chat. If anyone’s interested in the government contracts that are signed, this is from Duke, I think it’s really useful, so check that out if you are interested.

 

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