Moderna Chief Executive Stephane Bancel will face off with Sen. Bernie Sanders, I-Vt., on Wednesday over plans to quadruple the price of the company's Covid shot. The battle could rock Moderna stock.
This week, Moderna announced plans to begin charging $130 per dose of its Covid vaccine, Spikevax, in the U.S. once the public health emergency ends in May. So far, the U.S. government has footed the bill for Covid vaccinations. But that will change when the shot hits the commercial market.
Now, Bancel will have to explain the company's thinking before the Senate's Health, Education, Labor and Pensions Committee on Wednesday. Sanders heads up that committee and, in January, took Moderna to task, saying the company received about $1.7 billion from the U.S. government to develop the vaccine.
He also noted the proposed price is more than four times higher than the $27 the U.S. paid per dose of Spikevax in 2022.
On today's stock market, Moderna stock sank 1.6% to close at 152.10.
Moderna Stock: Negotiations Ongoing
Moderna President Stephen Hoge says multiple customers are negotiating different prices, according to Reuters.
He noted the Centers for Medicare and Medicaid Services pay $70 per dose for the seasonal flu shot and there were two to three times more hospitalizations from Covid in the past three months than from the flu. That was part of the company's pricing reasoning, he said.
Hoge also argued Moderna has more than paid back the federal funding by selling its vaccine at a lower cost to the U.S. government than its rival Pfizer. Moderna also ramped manufacturing itself.
Moderna stock is currently sitting just below its 200-day moving average, according to MarketSmith.com.
Pfizer Also Plans Price Hike
It's important to note, Moderna's pricing strategy is in line with the $110 to $130 per share price Pfizer announced for its BioNTech-partnered Covid vaccine last year. Pfizer plans to begin charging that new price when the U.S. exhausts its stockpile of government-acquired vaccines.
At the time, Pfizer's global primary care and U.S. president, Angela Lukin, said "that price range really does represent highly cost-effective modeling." But, notably, Pfizer didn't receive government funding to develop its Covid vaccine, Comirnaty.
Last year, Comirnaty generated more than $37.8 billion in sales. This year, sales are expected to fall to $13.3 billion. In comparison, Moderna stock analysts expect Spikevax sales to drop to $6.9 billion, down from $18.4 billion last year. But, a key difference between the companies, Comirnaty is just one of Pfizer's products. Spikevax is currently Moderna's only commercial drug.
Follow Allison Gatlin on Twitter at @IBD_AGatlin.
