How Profitable Is Coronavirus Vaccine Development?

In this Fool Live video, Healthcare and Cannabis Bureau Chief Corinne Cardina and longtime Motley Fool contributor Brian Orelli discuss whether there's money to be made from the coronavirus vaccines being developed by AstraZeneca (AZN -0.09%), Moderna (MRNA -9.17%), Pfizer (PFE -1.00%), BioNTech (BNTX -3.73%), and others. Investors know the initial sales prices of the vaccines because they've been pre-sold to government entities. The big question is whether there will be pressure to sell additional vaccine at close to cost. Fortunately, looking at the cost of flu vaccines, the current prices seem quite reasonable.

Corinne Cardina: We got a question from a nurse of an ICU that deals with COVID. He or she, JohnnyRN says, "Hi, Doc. I am a RN of an ICU that deals with COVID. One concern I have with investing in these biocompanies is that if they get a vaccine or a better treatment preventing it is that if a company does find a vaccine, how profitable will they be? I worry that they pretty much will have to give it away for cost or a small gain because the ethics of jacking up the price. Look at what happened to the CEO of the company that makes EpiPens." I think that's Mylan. "How profitable do we think that they will be if they are the first with the vaccine?"

There's a lot of public pressure that is going on with the vaccine stocks, but a lot of countries and governments have bought up vaccines in advance of an approval. I imagine a lot of the money is coming from these large government contracts. Any thoughts on that?

Brian Orelli: Yeah. I think we already know the price because they've been disclosing how much they're paying. Then you know how many doses they're paying for and you know what the contract is. You can figure out the price per dose. They're in the $10-$20 range, so that's what the government's paying for the vaccine. I don't imagine it will be much higher for individuals. There's some costs in terms of paying the doctor or the pharmacist or the nurse to give the vaccine, but I think the government is going to pay for most if not all of the vaccine.

So I don't think there's going to be more pressure than the current cost. You can look at influenza vaccines as a baseline cost, and they're in the $10-$20, they go all the way up to $50 or $70 for the cost that the companies end up making on the vaccines.