Morningstar - Q1 2021 - 36

Spotlight: Healthcare

EXHIBIT 1

Vaccine Rollout These COVID-19 vaccines will likely dominate the global market in 2021.
Pfizer/BioNTech's
BNT162b2

Moderna's
mRNA-1273

J&J's
Ad26.COV2-S

AstraZeneca's
AZD1222

Novavax's
NVX-CoV2373

Type

mRNA

Adenoviral Vector

Adjuvant-Boosted Antigen

Probability of Success

100%

50%

90% (EU)

70%

Status

Authorized
December 2020 in
U.K., U.S., EU

Authorized
December 2020 in U.S.,
January 2021 EU, U.K.

Phase 3 Data:
January 2021E;
EUA Q1 2021E

Phase 3 U.S. Data:
February 2021E;
EU EUA Q1 2021E

Ex U.S. Data: Q1 2021E;
U.S. Data: Q1/Q2 2021E;
EUA Q2 2021E

Efficacy

95% in Phase 3

94.1% in Phase 3

Phase 1 Data Fair:
Antibodies Strong but
Below Sera Levels

Ex U.S. Phase 3:
90% Low/High Dose
62% High/High Dose

Phase 1 Data Strong:
Antibodies 4x Outpatient,
1x Hospitalized Sera

Administration

2 Doses

1 Dose

2 Doses

Distribution

Ultracold Storage

Frozen/Refrigerated
(Local Transport)

Refrigerated

2021E Capacity
(Millions of Courses)

650

300-500

1,000

1,500

1,000

2021E Sales ($ Mil)

13,650

7,990

2,415

2,889

2,016

For Profit?

Yes

Key Questions

Durability,
Transmission Effect,
Cold-Chain Difficulties

Durability,
Transmission Effect,
Manufacturing Ramp

Single-Dose Efficacy
Safety Data

Data Required for EUA,
Dosing Regimen,
Safety Data

Data Required for EUA,
Manufacturing Ramp

Operation Warp Speed
Contract Terms

$39 (1st 100M Courses),
200M Option

$30 (1st 50M Courses),
$33 (200M Option)

$10 (1st 50M Courses),
200M Option

$8 Per Course,
150M Courses

$32 (1st 50M Courses)

Source: Morningstar.

London estimates that the new variant increased
the reproduction number in the U.K. by 0.4
to 0.7 and that it is roughly 50% to 75% more
transmissible.3 We assume that this variant could
become increasingly prevalent over the first
quarter of 2021, so we use a slightly higher range
for R0-2.5 to 3.5 rather than 2 to 3-in our
scenario analysis for herd immunity.
Given the high recent rates of infection and
analysis by the U.S. Centers for Disease Control
and Prevention through November, we think
cumulative infections grew to 30% of the U.S.
population by the end of 2020 and are poised to
grow to roughly 40% by the end of the first
quarter of 2021. Using an average protection rate

of 90% in the U.S. and an R0 of 3, we think 74%
of the population needs to be vaccinated or
infected to reach herd immunity. In our analysis,
shown in EXHIB IT 4 , this threshold is reached in
May, when we expect roughly 50% of the U.S.
population to have been vaccinated. (This assumes
that at least one more vaccine is approved by
early in the second quarter, likely from Novavax
or J&J.) Bear and bull cases varying these
estimates slightly give a range for herd immunity
from March to July.
Globally, we expect herd immunity to take more
time as billions are vaccinated throughout
2021 and 2022. We think overall global efficacy
could also be slightly lower. AstraZeneca AZN can

provide a massive supply of vaccine, but efficacy
so far in late-stage trials looks lower than
that of mRNA vaccines (between 62% and 90%,
depending on dosage). Therefore, we assume 80%
average vaccine efficacy and an R0 of 3 in our
base case, pushing herd immunity to early 2023.
Vaccine Sales Potential
We model vaccine supply and demand through
2023 as part of the pandemic and have
incorporated our sales and margin projections
into our models. However, with significant
uncertainty around the long-term nature
of coronavirus vaccine demand and the firms'
competitive positioning, we do not assume
sales beyond the pandemic.

3 Volz, E. et al. 2020. " Transmission of SARS-CoV-2 Lineage B.1.1.7 in England: Insights From Linking Epidemiological and Genetic Data. " MRC Centre for Global Infectious Disease Analysis,
Imperial College London. Dec. 31.

Morningstar Q1 2021

Morningstar - Q1 2021

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