See the latest Australian dollar analysis here:
PFE and partner BNTX reported positive top line Ph3 data for its COVID-19 vaccine, BNT162b2. The trial met the primary endpoint (preventing COVID-19 in those without evidence of prior SARS-COv2 infection) and per the release the case split between vaccinated individuals and those who received the placebo indicates a vaccine efficacy rate above 90%, at seven days after the second dose. But as the study continues, the final vaccine efficacy percentage may vary. Per the release the DMC has not reported any serious safety concerns and recommends that the study continues to collect additional safety and efficacy data as planned.
The data will be discussed with regulatory authorities worldwide. No details are available at this point on secondary endpoints, such as impact on severe COVID-19. In our opinion the data should support an emergency use authorization (EUA) filing by the end of November, in line with PFE’s prior guidance. In our view this is a positive for PFE shares and also bolsters our confidence in the outlook for other vaccine candidates in development. As we previewed, we believe a vaccine efficacy rate above a low end of ~60-65% will likely be viewed positively by investors. Dr. Anthony Fauci (Director of NIAID) has said scientists are hoping for a vaccine that is at least 75% effective, but that 50% or 60% effective would be acceptable (link).
Pfizer/BioNTech announced that its COVID-19 vaccine achieved >90% vaccine efficacy in preventing COVID infections based upon the first interim efficacy analysis of 94 confirmed cases, conducted on Nov 8. The efficacy is stronger than anticipated. The PR stated that “after discussion with the FDA, the companies recently elected to drop the 32-case interim analysis and conduct the first interim analysis at a minimum of 62 cases. Upon the conclusion of those discussions, the evaluable case count reached 94 and the DMC performed its first analysis on all cases.”
Pfizer plans to submit Emergency Use Authorization (EUA) in the third week of Nov, after the 2-month median safety milestone is achieved. We look forward to tolerability and safety details, which have not yet been disclosed. The trial will continue through a final analysis at 164 confirmed cases. The trial has enrolled 43,538 participants to date, and of these, 38,955 had received a second dose as of Nov 8.
PR noted that there will be a new secondary endpoint evaluating efficacy based on cases accruing 14 days after the second dose. Pfizer expects to produce >50M vaccine doses in 2020 and up to 1.3B doses in 2021. We plan to update our financial model; please see Oct 7 report titled “All eyes on COVID vaccine timeline” which includes our published Pfizer vaccine risk-adjusted model.
Pfizer and Biontech reiterated that they should be in a position to file for an EUA by the 3rd week of November. At this stage the likelihood of a major safety issue emerging is relatively low. After more than 38,000 individuals have been given the second dose of the vaccine, and observed now for at least 7 days, the risk of serious safety events, that might halt the program, is likely to be low. This means that Pfizer is likely to get their EUA by early December, and can then proceed to label and distribute the vaccine in the middle of December, with initial vaccinations being administered to high risk individuals by Christmas. Pfizer’s supply is likely to be limited through the first quarter of 2021, and then to ramp up quickly, and other vaccine companies are also likely to have their products available by late Q1 or Q2 next year.
There is a non-linear relationship between efficacy and the vaccination coverage required for herd immunity: the higher efficacy, the lower the herd immunity threshold. Assuming an R0 of 2.5, 90% efficacy implies that governments would need to reach vaccination coverage of about 60% to reach herd immunity. This should be feasible over the course of 2021.
Most governments in advanced economies have pre-ordered a significant number of doses; in per-capita terms the US, the EU, Canada, Japan, the UK, Australia and New Zealand have all pre-ordered enough doses to take a major step toward herd immunity early next year. In EM, governments have not ordered as much, having put more of their eggs in the AstraZeneca basket. Still, Pfizer’s competitive pricing means that many EM governments will be able to purchase significant numbers of doses into next year.
Most clearly, GBP is a major beneficiary, not only because the UK government has good exposure to Pfizer in its broad and deep vaccine portfolio, but also because the UK has perhaps struggled the most with managing the pandemic without a vaccine. In other words, a vaccine could make the biggest difference to the economic outlook in the UK, relative to its peers in G10.
That last point is noteworthy for the Australian dollar which will have gotten a lift out of our superior virus management. Soon to be reversed.
Looks pretty bullish for 2021/22 earnings everywhere except Australia.