11/17/21, 7:15 AM Pfizer CEO Says Companies Should Make Profit On Covid-19 Vaccines | Barron's

HEALTH

Pfizer CEO Says Companies Should Make Profit

On Covid-19 Vaccines
By
Josh Nathan-Kazis July 28, 2020 4:36 pm ET

Albert Bourla, Pfizer

’s
CEO, has no
patience for the argument that
pharmaceutical companies should not
be making a profit on the drugs and
vaccines they introduce to fight Covid-
19.

“I think it’s very wrong,” Bourla told

Albert Bourla, chief executive officer of Pfizer Barron’s on Tuesday. “You need to be
pharmaceutical company
very fanatic and radical to say
Drew Angerer/Getty Images
something like that right now ...Who is
finding the solution? The private sector found the solution for diagnostics, and the
private sector found the solution for therapeutics and is along [the] way to find more
solutions for therapeutics and vaccines. So how can you say something like that?
Doesn’t make sense.”

What kind of profit Pfizer (ticker: PFE) could make on its Covid-19 vaccine remains
unclear, but back-of-the-envelope calculations suggest that its revenue on the vaccine
could be enormous, if all goes well for the company.

Pfizer is among the leaders in the race to develop a Covid-19 vaccine, and began a
Phase 2/3 trial of its vaccine candidate on Monday. The company is charging the U.S.
government $19.50 a dose for the first 100 million doses, a price that Bourla said
Tuesday would be roughly the same rate the company charged any developed
country that committed to buying a similar volume of doses.

Covid-19 vaccine pricing has come under increased scrutiny in recent days, as
programs from Pfizer and other drugmakers have raced forward. At a House
subcommittee hearing last week, Rep. Jan Schakowsky, an Illinois Democrat, asked
drug companies that received research and development help from the government
on their Covid-19 to commit to selling their vaccine at cost.

Pfizer, which has long said it intends to make a profit on its Covid-19 vaccine, is alone
among the leading Covid-19 vaccine makers not to have taken government research
help.

“During the pandemic, we just went with the price that is the very low end of whatever
exists,” Bourla says. “It’s fractions of what vaccines of this high technology are sold [for]
in the U.S.”
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In an article this past weekend, Barron’s calculated that at $19.50 per dose, the 1.3
billion doses the company has said it plans to make by the end of next year could
translate to nearly $13 billion in sales, after the company splits its revenue with its
partner BioNTech (BNTX)—roughly the same as Pfizer’s all-time best-selling drug
Lipitor sold in its best year.

“From your lips to God’s ears,” said Pfizer’s chief financial officer, Frank D’Amelio, said
when asked about the calculation.

The company has laid out perhaps the most aggressive development timeline among
the companies in the Covid-19 vaccine race. Bourla said Tuesday that the company
hoped to dose the majority of participants in its Phase 2/3 study by the end of August,
and to submit the vaccine to the Food and Drug Administration in October.

Pfizer’s aggressive timeline for its Covid-19 vaccine stands in sharp contrast to
comments from Merck (MRK) CEO Ken Frazier, who said in an interview with a Harvard
Business School professor published on July 13 that “when people tell the public that
there’s going to be a vaccine by the end of 2020, for example, I think they do a grave
disservice to the public.”

Asked about the critique, Bourla said that Pfizer had managed large clinical trials
before, and that meeting the aggressive timeline was only possible if everything
worked exactly as planned.

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“So far, we are executing meticulously well,” Bourla said. “I’ve said repeatedly that in
order to be able to do that, the stars need to be aligned, and I’m very surprised that
they’re still aligned, but so far they are. And right now, we started yesterday already our
Phase 3 study.”

Bourla spoke to Barron’s shortly after Pfizer reported earnings that beat Wall Street
expectations. They come as the company prepares to spin off its Upjohn division,
which sells older drugs, and exclusively dedicate itself to developing new
pharmaceuticals. The spinoff is now set to take place in the fourth quarter of this year,
later than initially expected. D’Amelio said that the delay was entirely a result of Covid-
19-related disruptions.

As Bourla sold investors and analysts on the new direction for Pfizer, he emphasized a
projected 6% annual sales growth rate over the next five years. One drug that was
meant to help drive that growth was the cancer medication Ibrance, which Pfizer was
testing in early breast cancer. That trial failed in May, sending shares down 7.2% the
following trading day.

Bourla says that he was “very surprised” that the trial failed, but that the 6% sales
growth rate projection still holds. “The 6% was based on a very broad range of
products” in various stages of development with different probabilities of success, he
says. “If it was one or two, then you can have binary events that can take it up or down
big time.” He says that the company had other successes that balance out the Ibrance
disappointment.

Shares of Pfizer closed up 4% on Friday, The stock is now flat since the beginning of the
year.

Write to Josh Nathan-Kazis at josh.nathan-kazis@barrons.com

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