COVID-19 vaccine: A $14bn opportunity for bioprocess vendors

The big four bioprocess vendors – Thermo Fisher, Danaher, MilliporeSigma, and Sartorius – are set to benefit from the commercial success of COVID-19 vaccines, according to Evercore ISI.

There are a host of vaccine candidates targeting the novel coronavirus (SARS-CoV-2) moving into and through the clinic, and while there is no guarantee of success a breakthrough product will be a lucrative market opportunity.

Specifically, a commercialized product could be worth upwards of $100 billion (€89 billion), according to the team at Evercore ISI, which did the math during a recent webinar.

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“We have heard anecdotal numbers from 1 billion to 8 billion doses as being needed for a credible vaccination program,” the analysts said. “Herd immunity kicks in when more than 50% of population is protected – which would imply approximately 3.5 billion require protection.”

Thus, conservatively, if a vaccine is given to one to three billion people at $50 to $100 per dose – based on the average Centers for Disease Control and Prevention (CDC) and private sector costs of vaccines commercially available for other infectious diseases – the market opportunity sits at between $100-200 billion.

Thus, for life sciences tools companies, the opportunity is set to be rewarding with the analysts estimating a market opportunity of between $7 billion and $14 billion. This is based on COGS (cost of goods sold) being at around 20% of the total and the vendors’ share of this being around 35%.

Vaccine vendors

The webinar acknowledged that there are different types of vaccines in development for COVID-19, whether live attenuated, inactivated, sub-unit, conjugate, or toxoid, but the manufacturing of any of these relies on similar supply chains and complex manufacturing workflows. This includes a purification stage made up of numerous clarification, filtration, and chromatography steps.

And as vaccine technology complexity continues to increase with use of recombinant methods, which could drive up COGs

The analysts also noted that in the current vaccine landscape the largest four vendors capture the lion’s share of products and services across all stages of the process, and this is likely to continue with the COVID-19 pipeline.

The top four firms are Thermo Fisher, Danaher (now incorporating the former GE Healthcare biopharma business Cytiva), Merck KGaA’s MilliporeSigma, and Sartorius.

Already Sartorius, Thermo Fisher, and MilliporeSigma have reported robust Q1 financials this year, citing COVID-19 as a factor.

However, Evercore ISI called out Thermo Fisher and Danaher, which it said holds approximately 20% and 15% of the overall life sciences tools space respectively, as being particularly set for a COVID windfall. Both firms pre-COVID were seeing growth levels at around 5-6% across the whole pharma and biopharma tools space, and post-COVID Evercore ISI expect this to rise to 6-9%.

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