Why do mRNA COVID-19 vaccines become surplus globally?

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Why do mRNA COVID-19 vaccines become surplus globally?

A few days ago, the US vaccine supplier Moderna and the European Commission (EC) jointly revised the cooperation agreement and agreed to postpone the previous vaccine delivery plan.

Why do mRNA COVID-19 vaccines become surplus globally?

Previously, the two sides planned to deliver the booster dose of the COVID-19 vaccine Spikevax supplied by Moderna in the second quarter of 2022. According to the latest agreement, the delivery time was delayed to late 2022 or early 2023.

In April, the European Commission revised its cooperation agreement with Pfizer, also delaying the previous vaccine delivery plan.

This series of moves shows that the demand for the COVID-19 vaccine in the European market is further declining. The European Commission said changes to the vaccine delivery agreement would help optimize demand and supply arrangements in member states.

In fact, several European countries have already destroyed surplus vaccines.

Switzerland has publicly announced plans to destroy more than 600,000 doses of the expiring mRNA vaccine.

According to media estimates, there are at least 7 million doses of mRNA vaccines in stock in Switzerland, but now the number of vaccinated people in the country is falling sharply. In May 2022, only 1,200 doses of the vaccine were vaccinated every day in Switzerland on average.

According to the Swiss government’s previous plan, 34 million doses of mRNA vaccines were ordered in 2022, which currently appears to greatly exceed the actual demand.

In February of this year, the Swiss government hoped to transfer 15 million doses of the vaccine ordered to the COVAX program. The COVAX project is a project jointly proposed and led by the Global Alliance for Vaccines and Immunization, the World Health Organization and the Coalition for Epidemic Prevention Innovation. It intends to provide COVID-19 vaccines to low- and middle-income countries around the world.

Switzerland is not the only country facing a vaccine glut.

In May 2022, the Danish government also publicly announced that it plans to destroy about 1.1 million doses of mRNA vaccines that are facing expiration. Before announcing the plan, the Danish government made a series of efforts to try to donate the batch of vaccines, but in the end no suitable recipient was found.

About 81% of Denmark’s population of 5.8 million received the 2-dose mRNA vaccine and about 62% received the third booster shot.

Danish government officials said that Denmark has donated about 7 million doses of vaccines so far, but considering the excess supply and the relative lack of vaccination awareness in developing countries, it is not easy to find a suitable country to receive the vaccine.

The same thing happened in the United States. According to reports, about 65 million doses of vaccines in the United States were wasted due to expiration or various other reasons. The core logic behind it is the oversupply and the decline in the willingness of the population to vaccinate.

For example, in the US state of Idaho, there are about 230,000 vaccine doses alive in the state, but only about 2,000 doses of vaccine reagents are currently administered each week. At this rate, the current inventory is enough to last Gaizhou for 2 years.

For Moderna, which relies on mRNA vaccines as its sole source of revenue, the significant decline in global vaccine demand is absolutely bad news.

Moderna expects to disclose research data for its next-generation vaccine, mRNA-1273.214, in June 2022. This bivalent mRNA vaccine combines the original mRNA-1273 vaccine with a variant that specifically targets the coronavirus omicron.

The U.S. Food and Drug Administration (FDA) is meeting this month to discuss whether the vaccine should be updated this fall to address omicron. If the next-generation vaccine is finally approved, it will be Moderna’s next-generation main sales product.

Regardless of whether a new mRNA vaccine is launched in the near future, Moderna’s stock price has fallen by about 70% from its peak based on the pessimistic outlook for the overall demand for the vaccine.

Although the vaccination rate of many low- and middle-income countries is not high, for example, the vaccination rate of many African countries is less than 5%, but the payment capacity of these countries is not comparable to that of European and American countries, and the market does not place their hopes on mRNA vaccines These regions can have too much commercial success.

In other words, the peak sales of mRNA vaccines in Europe and the United States, where the ability to pay, has gradually become a thing of the past, which also means that Moderna’s future revenue will inevitably suffer a sharp decline.

However, this will not change the conclusion that Moderna is the biggest winner of this round of the COVID-19 epidemic. In 2021 alone, the company will have a net profit of 12.2 billion US dollars.

As of the first quarter of 2022, Moderna had $19.3 billion in cash and cash equivalents on its books, a figure that could change the rules of the game for the industry.

For many mRNA vaccine companies that are still in the research and development stage, in addition to crafting technology, how to use differentiated business strategies to survive in the post-epidemic era is also a key issue to consider.

Why do mRNA COVID-19 vaccines become surplus globally?

(source:internet, reference only)

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