Despite new COVID variants spreading through the country, falling vaccine demand is prompting market-leading vaccine-makers Pfizer and Moderna to find their fortunes elsewhere. 

Since January, Pfizer’s stock has shed 36% and Moderna’s stock has shed 42% closing on September 22, while the S&P has steadily ticked up by 11% over that same period. A prevailing “COVID is over” sentiment that was gaining on the companies through the end of last year seems finally to have caught up to them, analysts say, leaving the future of Pfizer and Moderna’s share up to everything but COVID.

“People are not only just getting used to living with COVID, but people are also just tired of getting vaccines,” said Karen Anderson, an analyst at Morningstar Research who watches Moderna stock. I don’t think the stock has really been able to shake the kind of underlying trend of what’s going on with COVID.”

Moderna stock soared by 2,316% in September 2021 and Pfizer stock reached its highest ever at the end of that year, but now increasing numbers of people are shirking the shots that gave both companies skyrocketing boosts in the pandemic years. 

Pfizer and Moderna have trailed the S&P500 for the last few months as reduced demand for vaccines – company-defining products of the last three years – pulls investors away.

Neither company expects such a bounty this year. Sales of Moderna’s COVID-19 vaccine paled in the second quarter, which was behind a 94% fall in sales from the same period in 2022. Pfizer acknowledged the same somber headwinds – revenue from the vaccine and Paxlovid had fallen 64% and 58% respectively from the year prior. 

Leadership at both companies emphasized “uncertainty” around vaccine take-up in 2023 and “non-COVID product” growth in Q2 earnings calls as reassurance to investors watching the stocks plummet over the last year. In the first six months, Pfizer administered only 12.4 million doses, behind on its expected goal of 100 million for the year. And in addition to lackluster vaccine demand, recent government action is also hurting company bottomlines – Pfizer CEO Albert Bourla called negotiations with the federal government to reform drug pricing a “gun to the head” conversation. The Inflation Reduction Act’s drug pricing models aim to save $25 billion in Medicare costs by 2031.

Investors may be getting skittish over falling vaccine demand, but in the long-term, the futures of Pfizer and Moderna rest on almost everything but the COVID-19 vaccine, which warrants a more clear-eyed look at what the two companies can offer next. Pfizer, a long-established brand with a diverse portfolio, is ramping up its research and manufacturing capabilities with a planned acquisition of oncology research company Seagen in the works. Compared to the 174-year old Pfizer, Cambridge-based Moderna is new on the scene and entirely focused on leveraging mRNA for its research – so much so that Moderna sued Pfizer for patent infringement in 2022 for copying its mRNA technology for the COVID vaccine.

Aniruddha Kaushik, a strategist for a cancer research company in New York City, sold his Moderna shares early in 2022. Though its stock performance disappointed this year, Kaushik remains bullish on the technology. 

“Generally speaking from a stock value perspective, I think I’m more excited about Pfizer,” Kaushik said. “But probably from a technology perspective, I think that if Moderna can expand their disease areas – I really like mRNA vaccines in general, it’s a cool technology.”

In Kaushik’s view, Moderna is the Tesla to Pfizer’s Ford Motor Company – the latter a legacy brand, and the former a small, quick-to-rise-and-dominate outfit with “cool” tech that can only become more valuable.

“Investors are often very short-sighted, just focused very much on the next couple of quarters, instead of looking longer term at how a market could develop,” Anderson said. “Moderna is a company where I think it’s under-appreciated what their technology is capable of doing beyond COVID.” 

Moderna is doubling down on being the brand ambassador of mRNA: the company commissioned a 90-second ad spot coined “welcome to the mRNAge” and tennis enjoyers noticed a re-appearance of Moderna as a partner for the U.S. Open this year. The company also recently moved into Phase 3 of a trial with Merck to produce an mRNA vaccine for post-surgery treatment for patients with melanoma.

As “non-COVID” products gain increasing importance with investors, COVID vaccines will simply become reliable cash flow each year for the companies, like the flu vaccine, leaving them to quickly find their next act post the vaccine-related stock bonanza.

“The heavy enthusiasm for Pfizer that was once there, that’s gone and probably won’t come back specific to the COVID treatments,” said Damien Conover, a Morningstar analyst watching Pfizer stock. 

On the other hand, Kaushik is now reconsidering buying Moderna shares anew – because of everything but the vaccine.

“I don’t think that company is going away any time soon,” he said. “If they hit certain blockbuster indications, then that can only go up.”