COVID-19 vaccine producers: winners and losers

COVID-19 vaccines: a big technological success?

According to many studies, vaccination is an important strategy to combat the spread of infectious diseases. The recent experience with the SARS-CoV-2 virus over the last three years confirms this idea. COVID-19 vaccines have been effective in the fight against the COVID-19 pandemic and can be considered as a success from the point of view of public health.

As far as design and production are concerned, the COVID-19 vaccines have also been a remarkable achievement. The design and development of new drugs is a challenging, complex and slow undertaking. The duration of the process for vaccines is on average 10 years, according to the World Health Organization (WHO). In the case of the vaccine against SARS-CoV-2, though, this time span has been dramatically cut down.

Less than a year passed between the outburst of the disease in Wuhan in the early days of 2020 and the first vaccinations. The US regulatory agency for drugs, FDA, issued an emergency approval for the Pfizer-BioNTech vaccine, Comirnaty, on December 11, 2020. The Moderna vaccine Spikevax received a similar approval a week later, on December 18. These vaccines started to be administered to the population at the end of December of 2020.

Several factors contributed to expedite the process. First, the different stakeholders involved in the development process (pharmaceutical and biotechnological companies, governments, regulatory authorities, public health systems) coordinated their efforts and worked together on the funding, development and deployment of treatments to fight the SARS-CoV-2 virus. Second, for this development the different phases of clinical trials were implemented in parallel, rather than sequentially, to accelerate the development of vaccines; phase III studies started while studies on phase I-II were still ongoing. Moreover, the regulatory authorities streamlined their protocols and worked faster than usual to evaluate the clinical data and, when favorable, approve the vaccines.

Technological developments helped as well: the novel mRNA technology, which is the basis of several Covid-19 vaccines, facilitated the production of high volumes of doses very fast in comparison with other techniques. Plants started manufacturing the new vaccines at their own risk before the completion of the clinical tests and subsequent approvals. Finally, governments and local health systems displayed a tremendous logistic effort to distribute and administer vaccines to the population.

Have COVID-19 vaccines been a success also from the point of view of economic profitability? At first sight it may appear that vaccines are very profitable for pharmaceutical companies, because of the large turnover implied by programs of massive vaccinations in many countries. A segment of the public opinion seems to hold this belief. In fact, one of the arguments put forward by some anti-vaccination groups during the pandemic was precisely that the main outcome of vaccination campaigns was the generation of large profits for pharmaceutical companies. According to this view, when recommending massive vaccinations against COVID-19 government and public officials were serving the private interest of pharmaceutical companies, but not necessarily the common good of the population. This idea has permeated the hot debate between vaccine supporters and antagonists in the past months.

virus vaccine and injection, 3d rendering

Does this claim have any scientific grounds? Although it may seem surprising for those not familiar with this industry, the rate of return of vaccines has been typically low, because of complexities associated to their production and sale. First, the demand for vaccines is highly uncertain; furthermore, their production is difficult to escalate and is associated to non-linear costs. Consequently, vaccines may imply an increase in turnover in the short term but, unlike drugs of prolonged treatment or periodic use, they usually do not warrant a sustained and permanent increase of sales or profits over time.

It is too early yet to carry out a detailed and thorough analysis of the profitability of COVID-19 vaccines. This task would require dissaggregated data extracted from the analytical accounting of manufacturers, not available at this moment. At this point this analysis has to be carried out in an indirect fashion. One possible avenue is to look at the performance of stock prices for COVID-19 vaccine developers.

My coauthors Ricardo Diaz, Teresa Herrador-Alcaide and myself adopted this strategy in a paper which has just been published in the journal Risk Management and Healthcare Policy. The paper, entitled COVID-19 Vaccines, Healthcare Policies and Stock Markets: Are There Winners and Losers?, is available for download here.

Our methodology

We have used event analysis for our investigation. Event analysis is a tool widely used in finance to detect short run abnormal results or excess returns associated to the stocks of some companies with regard to the market. Abnormal returns are brought about by the active demand from potential investors, driven in turn by sound expectations about the evolution of the company triggered by an announcement or event. The underlying assumption is the efficiency of financial markets whereby new information quickly translates to stock prices.

The computation of abnormal returns is typically performed considering an index from the stock market as benchmark. Abnormal results, then, indicate that a particular firm outperforms the rest of the market.

Our sample and data

At the beginning of 2023 eleven vaccines had been granted emergency use by the World Health Organization. Five were produced by pharmaceutical or biotechnological firms listed in the NYSE or Nasdaq: Nuvaxovid  (Novavax), Spikevax (Moderna), Comirnaty (Pfizer), Ad26.COV2.S (Janssen-Johnson & Johnson) and Vaxzevria (AstraZeneca).

In our research we focus on shares from these five companies traded in two key US stock markets, the New York Stock Exchange and Nasdaq, to warrant homogeneity among the companies and markets considered. Johnson & Johnson undertook the production of the COVID-19 vaccine through its affiliate Janssen Pharmaceutica; since this last company is not listed in the stock exchange, we use as an approximation the stock of the parent company, Johnson & Johnson.

The five vaccine developers we consider differ in terms of previous experience, product portfolio and size. Pfizer is a large pharmaceutical firm with ample expertise in the development and manufacturing of drugs. It was founded in 1849 in New York. The company has designed and produced the COVID-19 vaccine in collaboration with BioNTech, a German biotech company. Moderna was founded in 2010 in Cambridge (Massachusetts). The Covid vaccine is the first product of the company with approval from regulatory agencies.

A scientist holds a petri dish uses a pipette to remove a sample of solution. In the background is a stack of petri dishes and two test tube racks which suggest the sterile environment of a laboratory. The hand is covered with a latex glove. A cool blue tone is the dominant color scheme.

AstraZeneca is a British-Swedish large pharmaceutical and biotechnological company, the result of the 1999 merger between the Swedish Astra AB and the British Zeneca Group. AstraZeneca developed the COVID-19 vaccine in United Kingdom jointly with Oxford University. This vaccine produced some side effects in younger individuals which, although rare, prompted several countries to limit its use to the elderly population.

Novavax is a small US biotechnological firm with previous work on vaccines for respiratory syndrome (MERS), SARS and Ebola. Anyhow, the company had not brought to the market any product before the COVID vaccine.

Johnson & Johnson (J&J) is a large company which manufactures several types of health care goods and  pharmaceutical products, including vaccines. The Johnson & Johnson’s COVID-19 vaccine is administered in one dose, which makes it especially convenient for itinerant groups or those in need of rapid coverage. 

Main results

Novavax was the first company to announce the development of a vaccine for Covid, as early as January 21, 2020. This attracted investment and generated large abnormal positive results for the company. As a matter of fact, in the first months of the pandemic the demand for shares from Novavax and Moderna was very active, entailing large increases in their stock prices. Over the following months, Novavax and Moderna registered as well large abnormal returns on the dates of various announcements related to the expansion of COVID-19 and the approval of aid packages to fight the disease.

On November 9, 2020, Pfizer announced that, according to the results of Phase III clinical trials, the effectiveness of its vaccine was 90%. The Pfizer stock registered positive (although moderate) abnormal returns on the subsequent days, implying that investors had sound expectations about the potential of this product. Shortly afterwards, on November 16, Moderna made a similar announcement, disclosing a rate of effectiveness of 94% for its vaccine. On November 24 Moderna closed a deal with the European Union to provide 160 million doses of its vaccine. The company exhibited positive and large abnormal returns for some days after these good news.

In contrast, on the date of the emergency approvals for their vaccines by the FDA, neither Pfizer nor Moderna registered significant abnormal results, probably because these authorizations were already discounted by the market.

We did not observe in the stock market any behavior suggesting that investors disagreed with the simplified and expedited procedures followed by the FDA to provide emergency authorizations to vaccines, despite the substantial reduction implied in the time-to-market for these products if compared with historical trends. Rather, it seems that investors supported the public authorities’ strategy of providing a swift and strong answer to the pandemic.

Phase III results were disclosed for the Johnson & Johnson and Novavax vaccine candidates on January 29, 2021; that same day the European Medicines agency approved the Astra Zeneca vaccine. The Johnson & Johnson and Astra Zeneca stocks, however, registered negative abnormal results on that date. Novavax registered a very large positive and significant abnormal result of 72%.

Finally, in March 19 the European regulatory agency (EMA) disclosed that the Astra Zeneca vaccine caused embolic effects; on April 7, though, a committee from this agency concluded that these effects were regarded as rare. None of these announcements impacted the stock price of Astra Zeneca significantly in the US stock market, probably because this firm attracted less interest from investors since its vaccine was not marketed in the US.

Several implications follow from our analysis. First, our results suggest that the markets have approved the swift and coordinated strategy from national and supranational authorities to fight the pandemic. This strategy has translated into different set of measures: financial support for vaccine developers, construction of a diversified vaccine portfolio with sufficient stock to handle the vaccination of high percentages of the population, simplification of the procedures necessary to obtain approvals from regulatory agencies, among others. Furthermore, these lines of action have been reinforced by financial markets by channeling additional funds to promising projects.

Second, some groups have been quite successful over the past three years expanding anti-vaccination claims (amplified by social networks); they have questioned the efficacy of vaccines often arguing that vaccines are mainly a source of huge profits by pharmaceuticals.  Our findings suggest, though, that the design and production of these remedies does not entail automatically large and sustainable gains for the developers, according to the behavior of the stock prices of pharmaceutical companies over the recent past. The only exceptions were Novavax and Moderna. In the case of Novavax, though, the interest of investors gradually disappeared and the stock price returned to more reasonable levels.

Third, our results suggest that financial markets are particularly sensitive to Phase III results (as already stressed by the literature) and to main agreements between producers and with public institutions. Hence some companies may experience large increases in stock prices in response to related announcements. These effects are larger in the case of small firms, which can be seen as high profit, high risk, investments and hence more prone to short term opportunistic behaviour. Ultimately, though, the market corrects these high expectations if they do not materialize in a reasonable span of time, as the case of Novavax shows. In parallel, investors keep an open mind toward small companies if they are successful and sustain these efforts with a surge in the demand for their stocks, as the example of Moderna suggests.

Other complementary evidence about winners and losers

These findings are consistent with other facts regarding the activity of the firms. So far the FDA has approved the Pfizer, Moderna and J&J vaccines for the US (but not the Astra Zeneca) and provided an emergency use authorization for Novavax in July 22, 2022. The European Medicines Agency has issued standard marketing authorizations for the Pfizer, J&J, Moderna and Astra Zeneca vaccines, whereas Novavax has received a conditional marketing authorization. The market shares of COVID vaccines manufacturers in these two big areas display large differences.

According to the Center for Disease Control and Prevention, Pfizer has provided 60% of the total COVID-19 vaccine doses delivered in the US so far; Moderna has supplied 36%, Johnson & Johnson 3,2% and Novavax 0,14%. In the European Union 72,6 % of doses administered correspond to Pfizer, 17% to Moderna, 7,5 % to Astra Zeneca, 2,1% to Johnson & Johnson and 0,03% to Novavax (Figure 1)

Figure 1. Market share, COVID-19 vaccines, by manufacturers

Source: Shares with respect to doses delivered

Source: Shares with respect to doses administered.

Pfizer, therefore, has been the clear winner from the vaccine race because of a combination of factors: the company has employed Artificial Intelligence to follow the spread of the virus, has used better technology to produce the vaccine and has engaged in a rapid recruitment of volunteers for clinical trials, among others. This strategy has paid off, in terms of the market penetration reached y the firm. The achievement is even more impressive because the company has not developed vaccines in the last decades, and because Pfizer did not receive any funding from the US government (although its partner BioNTech did get funding from the German government).

Moderna has also profited from the COVID-19 vaccine. It is the only commercially available product from the biotechnological company, and represents the bulk of its sales.

The Astra Zeneca vaccine candidate was negatively affected by supply problems in production and the apparition of some adverse effects (blood clots). In terms of technology, the Astra Zeneca vaccine lagged behind the more successful Pfizer-BioNTech and Moderna vaccines, developed with the RNA technology. Anyway, it was able to produce 2,6 billion doses, from which two thirds went to low and middle-income countries. The company has reported that the gross profit margin from the COVID-19 vaccine is expected to be lower than the firm average. At the beginning the vaccine was sold at cost, but later on the company announced that it would take in a small profit when selling to wealthy countries. Market penetration in the European Union has been modest.

According to the small market share got in the US and Europe, Johnson & Johnson has not able to find a niche for its vaccine, although it was especially convenient because it could be administered in one shot (in contrast to the Moderna, Pfizer and Astra Zeneca vaccines).

Despite being the first to announce the development of the vaccine, Novavax has not been successful with the product, either. It has only obtained a very small market share in the US and Europe so far. The company had some issues with the manufacturing of the vaccine and the production of the vaccine experienced delays, probably because of lack of expertise in massive production. These drawbacks entailed that the Novavax vaccine arrived to the market too late, when no additional vaccines were really necessary because all middle-high income countries had purchased their units.


Vaccines have been key in order to reduce the transmission, incidence and mortality associated to Covid-19. Their economic impact on the producers has been mixed. Not all the pharmaceutical and biotechnological firms which engaged in their design and production seem to have profited from them.

The clear winner from the COVID-19 pandemic in terms of abnormal positive returns has been Moderna. Novavax was also able to generate high expectations and attract investors at the beginning of the pandemic, when the firm announced a preliminary engagement with the COVID-19 vaccine, but real advancements came too late, probably because of the lack of previous expertise with the manufacture of this product; as a consequence, gains in the share value gradually vanished. Pfizer has also experienced positive abnormal returns in response to events associated to the development of the vaccine, although more moderate than in the case of Moderna.

According to our results, the stock market has been been very sensitive to the disclosure of Phase III results in the case of Pfizer and Moderna. In general, it has also be quite accurate in its estimation of the potential of the vaccines, in terms of the generation of abnormal results.

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