Pfizer Will Charge the U.S. $19.50 a Dose for Its Covid-19 Vaccine. The Stock Jumps. -- Barrons.com
9:47 AM ET 7/22/20 | Dow Jones
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By Josh Nathan-Kazis
The U.S. government has put in an order for enough doses of Pfizer and BioNTech experimental Covid-19 vaccine to inoculate nearly every American. It is paying a bit more than analysts expected.
Pfizer (ticker: PFE) and BioNTech (BNTX) said Wednesday that the companies are selling 100 million doses of the vaccine to the U.S. Department of Health and Human Services and the Department of Defense for $1.95 billion, a deal that prices each dose of the experimental vaccine at $19.50. The deal allows the U.S. government the option of buying an additional 500 million doses.
In a note on Tuesday morning, Mizuho analyst Vamil Divan called the price "somewhat higher than expected."
"We believe there have been a wide range of expectations for what Pfizer would ultimately charge, but believe overall it was closer to the $15 range per dose," Divan wrote.
Pfizer and BioNTech are testing the vaccine as a two-dose regimen, so 600 million doses would be enough to vaccinate almost the entire U.S. population of 320 million people. At the price the government is paying for the first 100 million doses, a full course would cost $39.
Americans would receive the vaccine free, according to the companies. Pfizer and BioNTech would provide the doses after the vaccine receives approval or emergency authorization from the Food and Drug Administration, and the government will make the payment after the first 100 million doses are delivered.
The price of Covid-19 vaccines is likely to become a key political issue in the coming months. On Tuesday, at a House subcommittee hearing, Rep. Jan Schakowsky, an Illinois Democrat, pressed drugmakers on whether they would price their Covid-19 vaccine at cost. Pfizer, along with Moderna (MRNA) and Merck (MRK), said they planned to seek a profit.
"We recognize these are extraordinary times, and our pricing will reflect that," Pfizer chief business officer John Young told Schakowsky. "During the term of the pandemic, we will price our potential vaccine consistent with the global health emergency we are facing."
The announcement of the deal with the U.S. government comes days after the companies announced a deal with the U.K. government to supply 30 million doses of the vaccine. The financial terms of that agreement weren't disclosed.
Shares of Pfizer jumped Wednesday, climbing 4.8% to $38.44 shortly after the market opened. Shares of BioNTech climbed 6.2% to $97.26. The S&P 500 was up 0.1%.
Pfizer and BioNTech have laid out among the most-aggressive timelines for developing their Covid-19 vaccine. The company has said it hopes to seek emergency-use authorization from the FDA in October.
While data remain preliminary, Raymond James analyst Steven Seedhouse wrote Monday that the Pfizer and BioNTech vaccine looked the most promising among the fastest-moving Covid-19 vaccine programs, compared with offerings by Moderna and AstraZeneca (AZN).
Write to Josh Nathan-Kazis at josh.nathan-kazis@barrons.com
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