Moderna and Pfizer Race to Release RSV Vaccines

Key Points

• Moderna And Pfizer have engaged in another vaccine arms race.
• This time it's to treat the deadly and contagious respiratory syncytial virus (RSV).
• The impact of releasing the vaccine is potentially huge, as RSV costs the US around $3 billion annually.

Moderna Inc. NASDAQ: MRNA is in another arms race with Pfizer Inc. NYSE: PFE this time to produce RSV (Respiratory Syncytial Virus) vaccines, which will be the first of its kind.

RSV is a contagious virus that can cause serious respiratory illness in infants and older adults. RSV is one of the most common causes of hospitalization in children under one and can also lead to pneumonia, bronchiolitis, and other respiratory illnesses in children, adults, and the elderly. The virus is also one of the leading causes of hospitalizations in the US.

As reported by CNBC, both companies are rapidly rolling out vaccine trials to get approval from the FDA as soon as possible.

Results from these trials have been made publicly available, so let's take a quick look at how each company tracks toward approval.

Moderna publishes RSV vaccine trial data

Moderna said its vaccines to help treat RSV on Tuesday this week showed considerable efficacy. This included being 83.7% effective in treating lower respiratory tract disease in people aged 60 and older and 82.4% effective in treating lower respiratory tract disease in people with three or more symptoms.

So far, there have been no safety concerns raised by Moderna, and the results from the study will be published in a peer-reviewed journal in the near future. Moderna has since made plans to apply the vaccine with the FDA sometime later this year.

The RSV vaccine will use the same vaccine technology found in its COVID-19 vaccines.

RNA vaccine technology is a revolutionary new form of vaccine that uses messenger RNA (mRNA) to initiate an immune response within the body. mRNA is a molecule that contains instructions for the body’s cells to produce proteins that can then be used to create an immune response. By injecting mRNA into the body, scientists can direct the body to produce proteins that mimic the surface of a virus or bacteria, thereby triggering an immune response.

Pfizer announces results

Pfizer also announced that its vaccines had considerable efficacy last November. The vaccine was said to have an efficacy of 81.8% in infants for lower respiratory tract illness for the first 90 days of life. That efficacy number dropped to 69.4% for the first six months of life.

Like Moderna, no safety concerns were raised by the company during the trial. Its results are also being posted to scientific journals for review by medical experts and researchers.

Pfizer first received breakthrough therapy designation from the FDA in March last year.

The Breakthrough Therapy Designation granted to Pfizer's vaccine candidate is an important step towards making the vaccine available to eligible pregnant women and their infants. The designation is based on clinical data showing that the vaccine candidate was able to stimulate an immune response in pregnant women and reduce RSV infection in infants.

The FDA's decision triggers a rolling review process, meaning that the review of the vaccine candidate could start before the completion of the clinical study. 

Impact of the vaccine

If the vaccines are approved and rolled out, they could materially impact Moderna's and Pfizer's stock prices. This can be seen by examining some recent history. When Moderna published its trial data, the company’s share rallied 7.53% at the market open on Wednesday, which put it at a 4.35% gain over the past five days. 

Then during the pandemic, the stock prices of both companies rallied strongly, from around $104 per share for Moderna in December 2020 to $480 in August the year after. Pfizer also shared similar price gain characteristics. Although we may not see a comparable share price appreciation as we did for the COVID-19 vaccine, history shows us that the stock prices of both companies rise sharply when a new vaccine is introduced, so this may be something that’s on the cards for these companies moving forward.

According to the Centers for Disease Control and Prevention (CDC), RSV is young children's leading cause of lower respiratory tract infections. It is estimated to affect up to 125,000 infants in the United States annually. In adults, RSV can cause mild cold-like symptoms but can also lead to more serious complications such as pneumonia, thus making it an important healthcare issue for many.

The World Health Organization estimates that RSV is responsible for more than 33 million lower respiratory tract infections and 200,000 deaths in children under five every year. In the United States alone, RSV is estimated to cost the healthcare system more than $3 billion annually in hospitalizations and other medical costs.

Thus, these high damages mean that both companies could stand to significantly grow top and bottom line financials if and when these vaccines are approved and rolled out to the marketplace. The total addressable market for the vaccines is large and could help to plug some of the holes left over from earnings generated from COVID-19 vaccines that have begun to slow down.