Pfizer, BioNTech Score $2 Billion Deal For U.S. Coronavirus Vaccine - Investor's Business Daily

Pfizer (PFE) and BioNTech (BNTX) scored a deal with the U.S. government Wednesday for up to 600 million doses of their coronavirus vaccine.

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Under the terms of the deal, the government will initially purchase 100 million doses for $1.95 billion and has the option to acquire an additional 500 million doses. Americans will receive the coronavirus vaccine for free.

The price tag is higher than expected, Mizuho Securities analyst Vamil Divan said in a report. The U.S. government is paying $19.50 per dose of the coronavirus vaccine. Investors widely expected the vaccine to cost roughly $15 per injection, he said.

"We note that according to its website, the U.S. (Centers for Disease Control and Prevention) pays $11.67-$18.19 for the seasonal influenza vaccine," he said. "It is also not clear to us if Pfizer may look to increase the price of the vaccine somewhat once the current pandemic is more under control."

Coronavirus Vaccine News Buoys Pfizer, BioNTech

The news helped Pfizer and BioNTech extend their recent runs. In midday action on the stock market today, Pfizer stock jumped 3.7% near 38.10. BioNTech stock popped 9.7% near 100.50.

Ultimately, it's unclear how profitable the coronavirus vaccine could be for Pfizer, Divan said.

"Pfizer has commented that they expect to spend more than $1 billion this year to develop the vaccine," he said. "Over time, we would expect the margin profile for the vaccine to improve, but also note that Pfizer splits economics for this vaccine with BioNTech."

The companies are studying four potential versions of the coronavirus vaccine. Two have won Food and Drug Administration fast track designation. This allows for a speedier development and review path.

The companies plan to begin a Phase 2 and Phase 3 study of their coronavirus vaccine later this month. They also plan to seek Food and Drug Administration review in October and then begin to manufacture up to 100 million doses by the end of 2020.

By the end of 2021, Pfizer and BioNTech say they can deliver more than 1.3 billion doses.

Follow Allison Gatlin on Twitter at @IBD_AGatlin.

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Pfizer, BioNTech Score $2 Billion Deal For U.S. Coronavirus Vaccine - Investor's Business Daily
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