Pfizer Inc has kicked off a pilot delivery program for its COVID-19 vaccine candidate in four US states, as the US drugmaker is likely to grapple with distribution issues due to its ultra-cold storage requirements, Reuters reported. Shares are up 2.9% in Tuesday’s pre-market trading.
Pfizer’s (PFE) experimental vaccine, which was this month shown to be more than 90% effective in preventing COVID-19 based on preliminary data, needs to be shipped and stored at -70 degrees Celsius (minus 94°F), which is significantly below the standard for vaccines of 2-8 degrees Celsius (36-46°F).
“We are hopeful that results from this vaccine delivery pilot will serve as the model for other US states and international governments, as they prepare to implement effective COVID-19 vaccine programs,” Pfizer said in a statement seen by Reuters.
The US drugmaker selected Rhode Island, Texas, New Mexico, and Tennessee for the program based on their differences in overall size, diversity of populations, immunization infrastructure, and need to reach individuals in varied urban and rural settings.
The four states will not receive vaccine doses earlier than other states because of the pilot, nor will they receive any differential treatment, according to the Reuters report.
Pfizer and its partner BioNTech (BNTX) expect to have sufficient safety data on the vaccine candidate from the ongoing large scale late-stage trials by the third week of November before proceeding to apply for emergency use authorization (EUA).
The two partners have a $1.95 billion deal to supply 100 million doses of the approved vaccine to the US government, which has an option to purchase up to an additional 500 million doses.
Shares of Pfizer are down almost 5% on a year-to-date basis, and the stock scores a cautiously optimistic Moderate Buy analyst consensus. That’s based on 4 Buys vs 8 Holds. The average analyst price target stands at $41.42, putting the upside potential at 11% over the next 12 months.
This week, JP Morgan analyst Chris Schott, reiterated a Hold rating on the stock with a $36 price target, saying that although the progress made on the COVID-19 program has been impressive, financial implications also need to be considered.
“As we think about what this means from a commercial perspective, we expect significant sales (albeit at low margins) for BNT162 in 2021 (~$11bn) and 2022 (~$9bn) with revenues declining from there,” Schott wrote in a note to investors. “However, from a valuation standpoint, we believe PFE shares reflect something closer to our best case scenario for the vaccine ($4/share of value, ~$25bn of market value) vs our base case estimates (~$2/share, ~$10bn of value).” (See Pfizer stock analysis on TipRanks)
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