The world's most sophisticated drug companies are putting billions into vaccines - despite the political environment

By Craig Williams

The science of vaccines is advancing

The global vaccine market is on track to reach an estimated $116 billion by 2033.

The vaccine discourse gets more contentious by the month. These days, it's a mix of stories about COVID-19, the measles, vaccine hesitancy, political sparring and changing recommendations.

Amid the fiery debates, it is easy to overlook that the smartest players in the biopharmaceutical industry already placed their bets on vaccines.

In the past year alone, Eli Lilly (LLY) has spent up to $3.8 billion to buy three vaccine companies: Curevo, LimmaTech Biologics, and the Vaccine Co.; Sanofi (SNY) bought Vicebio and Dynavax for $3.4 billion; and Merck (MRK) is running a $1 billion vaccine manufacturing facility in North Carolina that opened last year.

Three of the world's most sophisticated drug companies are putting billions of dollars into vaccines at the exact moment the public conversation is the most fractured.

But that confidence isn't reflected in funding from venture capital, which is what the earliest-stage biotechs usually rely on. An industry report in 2024 found that drugmakers developing vaccines for infectious diseases received just 3.4% of all biopharma venture capital in the preceding decade. That is in stark contrast to oncology, which received a whopping 38% of that capital.

More recently, even that already modest level of investment has gone down. STAT reported last year that the federal government's decision to halt nearly $500 million in funding for mRNA vaccine research made already hesitant private investors even more wary.

Vaccine policy in the U.S. has long been a roller-coaster, due to the uncertainty of regulations and public behavior. And for a new investor, the vaccine sector can look too mature for a second look since it's already locked up by large incumbents with established products.

Here are four questions to figure out if betting on a vaccine is a good idea: How large is the market? Is the opportunity stable? What are the unmet needs? And how much value can these medicines deliver?

1. Let's start with size of the vaccine market.

The global vaccine market is on track to reach an estimated $116 billion by 2033. This puts it in the same league as the global diabetes-drug market, one of the industry's steadiest profit engines. Yet vaccines attract a fraction of the excitement. While it's easy to make the debate about vaccines an American story, about 65% of the market sits outside the U.S., representing a substantial opportunity that domestic investors often don't price in.

2. The stability of the vaccine market is worth considering

This depends on the type of patient or what kind of revenue generator is at play. Vaccines address a continually renewing patient population, in which each cohort of babies creates demand for routine immunizations. In other words, as the population grows and gets older, so does the vaccine market. And as long as pathogens co-exist with humanity, emerging and evolving infectious diseases will continue to be a risk, creating persistent demand for new or improved vaccines.

3. The unmet need is the most interesting issue

There is substantial room to improve vaccines, both in how they are developed and in the protection they provide. The most familiar example is the flu shot: Effectiveness varies by season, usually averaging just around 40%. Yet even with these limitations, flu vaccines still represent an estimated $9.5 billion market. Consider what happens to that number with even just a marginal improvement in effectiveness and immunization rates. More ambitious science is already demonstrating that we can predict viral evolution and design vaccines that get ahead of disease.

We are now poised to deliver more than just incremental improvements in efficacy and address longstanding gaps in protection. But it doesn't stop there. With vaccines we have the opportunity to tap into new and even larger markets beyond the obvious. We are proving that vaccinating against HPV can rid an entire generation of cervical cancer. We are seeing links between shingles vaccines and reduced dementia risk. We are learning about the role of Epstein-Barr virus in multiple sclerosis, raising the possibility of preventing multiple sclerosis through vaccination. We just saw Moderna (MRNA) and Merck's therapeutic cancer vaccine help prevent melanoma from coming back. There is ample opportunity for vaccines to do more than we ever expected.

4. The value of vaccines in public health is the clearest opportunity

Measured by cost relative to impact, a vaccine is objectively medicine's best investment. It only costs $40 per dose in the U.S. to protect yourself against polio, a disease that once regularly caused paralysis in children.

Vaccines deserve the same disciplined consideration as any other biotech investment. It's clear that the challenges facing vaccines are real. So are the opportunities. I have no doubt that the public debate will continue, but we cannot let headlines guide action over business fundamentals.

So the next time you think about vaccines, I urge you to look beyond public skeptics to see an opportunity hiding in plain sight.

Craig Williams is a longtime vaccine executive who is now president and CEO of Apriori Bio, a biotech company developing variant-resilient vaccines and treatments. He is also a partner at Flagship Pioneering, the company that created Moderna.

-Craig Williams

This content was created by MarketWatch, which is operated by Dow Jones & Co. MarketWatch is published independently from Dow Jones Newswires and The Wall Street Journal.

(END) Dow Jones Newswires

11-12-26 0800ET