COVID-19 efficacy data has positive revenue opportunities

MOODY’s Investors Service has not mooted any immediate action on Pfizer Inc’s A1 long-term rating – which remains under review for downgrade – despite the recent efficacy data published by Pfizer and BioNTech SE is positive for Pfizer’s credit profile.

The credit rating review is related to Pfizer’s pending separation of pharmaceutical manufacturing firm Upjohn Company which the international rating agency expects to close next week.

“The efficacy data relates to an interim analysis as the vaccine trial is not yet complete but indicates a vaccine efficacy rate of over 90%,” Moody’s pointed out in an issuer comment.

“This is based on the first 94 instances of COVID-19 infection among participants in the trial although the exact breakdown of infections occurring in the vaccine group versus the placebo group has not been disclosed.”

According to Moody’s the efficacy portion of the trial will be completed once 162 instances of COVID-19 infection occur.

“In addition, the safety portion of the trial is not complete, but is anticipated to conclude during the third week of November,” explained the credit rating agency.

“Pfizer and BioNTech plan to submit an application for Emergency Use Approval following the successful attainment of the safety data.”

According to Moody’s, positive social considerations in its ESG (environmental, social, and corporate governance) framework relate to customer relations with key stakeholders, including patients, doctors, hospitals, governments and global health authorities.

“In addition to having positive social considerations, an approval of the vaccine will also bring substantial revenue and earnings opportunities to Pfizer,” noted the credit rating agency. “These will mainly accrue during 2021 when we anticipate the largest number of doses will be manufactured and distributed.”

Pfizer has announced a manufacturing production target of up to 1.3 billion doses during 2021. The vaccine regimen involves two doses, 21 days apart.

Even with competition from other vaccine developers, Moody’s expects the majority of this production will be sold.

Several government bodies have already entered purchasing commitments, including the US agreeing to purchase 100 million doses for US$1.95 bil with options to purchase 500 million more.

Japan, the UK, Canada and other countries have also entered agreements with Pfizer while discussions are underway with the European Union. – Nov 12, 2020

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