GSK, Pfizer under pressure after CDC narrows RSV shots age recommendation

Shares of GSK (GSK) and Pfizer (PFE) are under pressure following the Centers for Disease Control and Prevention’s updated RSV vaccination recommendation for adults. The U.S. health agency has held off on recommending the use of respiratory syncytial virus, or RSV, vaccines for adults under age 60.

CDC RECOMMENDATION: On Wednesday, the CDC updated its recommendation for the use of RSV vaccines in people ages 60 and older. For this upcoming respiratory virus season, CDC recommends everyone ages 75 and older receive the RSV vaccine, and people ages 60–74 who are at increased risk of severe RSV, meaning they have certain chronic medical conditions, such as lung or heart disease, or they live in nursing homes, receive the RSV vaccine. The decision echoes a similar outcome by its panel of outside advisers.

Of note, GSK launched its RSV vaccine Arexvy in the U.S. last summer following Pfizer’s approval for its own shot in adults ages 60 and over. Moderna (MRNA) has also received regulatory approval for its RSV vaccine last month. The stock was trading lower on Wednesday after the company announced that its RSV shot mRESVIA showed 50% efficacy in preventing RSV after 18 months.

Commenting on Moderna’s results from its Phase 3 data presented at the ongoing ACIP meeting, including updated Season 1 and Season 2 data on the company’s RSV vaccine, Jefferies said the data was “consistent with expectations and mostly expected” and should support a positive recommendation for use for people over 60 years old. However, the firm acknowledged that “on the margin, the stock might be trading off a little” because the detailed numbers on Season 2 were on the lower end of expectations. Jefferies kept a Buy rating and $180 price target on Moderna shares.

RSV FRANCHISES ‘DELIVERED A BLOW’: Citi says despite Moderna’s 18-month RSV vaccine efficacy for mResvia “being underwhelming and uncompetitive,” the CDC’s Advisory Committee on Immunization Practices “delivered a blow” to GSK’s Arexvy and Pfizer’s Abrysvo with initial recommendations that narrow the addressable population among 60–74-year-olds to under 40%. This severely hampers the near-term reimbursement outlook, postponing any opinion on 50–59-year-olds for GSK despite recent FDA approval, and taking booster vaccination opportunities off the table for now, the firm tells investors in a research note.

Meanwhile, Citi believes the consensus peak sales of $2B for Moderna’s mResvia feels “hopelessly over optimistic.” It also expects 2024 and peak Arexvy/Abrysvo expectations to fall materially.

PRICE ACTION: In morning trading, shares GSK have dropped a little over 1% to $38.46 after being down as much as 7% following CDC’s decision. Also lower, Pfizer’s stock has slipped about 1% to $27.19 and Moderna has slid almost 3% to $118.93.