欧洲生物制药：全球疫苗入门：预防永远是最好的药物

Global Vaccines Primer: prevention is always the best medicine We expect vaccines to remain the biopharma industry segment with the highest entry barriersand strongest value proposition. We thus project a vaccines industry sales CAGR (24-34e) of4%. In our view the best stock market exposure to this oligopoly is via Sanofi and GSK. Justin Smith+44 20 7762 5899justin.smith@bernsteinsg.com Florent Cespedes+33 1 42 13 42 49florent.cespedes@bernsteinsg.com Vaccines industry growth: what are the drivers and prospects?We project globalvaccines sales for the oligopoly (GSK, SAN, MRK, PFE, MRNA) of $68bn in 2034 fora CAGR (24-34e) of 4%. Drivers should include global population growth, increasingaccess to healthcare, demographics and rising awareness of the benefits of preventingdiseases. We expect this growth to be low risk as nearly two thirds should be driven by fourfranchises which are already well entrenched (influenza, cancer (HPV), lung (RSV) and brain(meningitis)). Vaccines are also long duration assets as there is no patent risk. Althoughwe project the corresponding EU/US large cap pharma (ex vaccines) CAGR to also be 4%,this has a higher risk profile. In our view, pharma growth is more dependent on pipelineapprovals, is more sensitive to competition, technological disruption and patent expiries.We also believe that vaccines are far more cost-effective than drugs. Courtney Breen+1 917 344 8407courtney.breen@bernsteinsg.com Woody Polglase+44 207 170 5123woody.polglase@bernsteinsg.com Why are the entry barriers in vaccines so high? 1/Regulations: considering thatvaccines are given to healthy individuals their side effect risks have to be much lower thanfor pharmaceuticals. Hence, the human trials required to secure regulatory approvals ofvaccines typically involve alot more patients than for drugs and thus are more expensiveto run. We also believe that the post approval surveillance requirements for vaccines arevery demanding2/Manufacturing: our channel checks indicate that a new vaccines plantcan require ca. $300m of ‘up-front’ capital and take at least 4-6 years to build. Productionprocesses for vaccines at commercial scale are also long and complicated (eg ultra-sterileconditions are paramount) and suitably qualified workers aren’t plentiful3/Intellectualproperty:considering the above, unlike pharmaceuticals, the sales of vaccines don’tdecline post patent expiry. Hence, there are examples in our coverage universe of vaccineswhich are still growing in their third or fourth decade post launch (helped by life cyclemanagement such as more strains covered). Why are we bullish on Sanofi (O) and GSK (O) ?In our viewSanofioffers above average,low risk EPS growth. We also expect improving visibility on the refocused, pipeline (whereexpectations are low) to alleviate concerns about portfolio concentration risk. This inturn should expand the PE26 of 10x. ForGSK,our 2031 sales forecast is double-digitpercentages >guidance and >Bloomberg consensus due to HIV and the pharma pipeline.We also think two 2026 catalysts should rerate GSK ‘s PE26 of 7x. Why are we more cautious on Merck & Co (M), Pfizer (M) and Moderna (M) ? Pfizerfaces a -1.6% revenue CAGR through 2029 due to major losses of exclusivity (LOE) andthe Inflation Reduction Act (IRA) impact, with limited pipeline visibility and recent setbackslike danuglipron (obesity); valuation is low at 7.6x FY26 P/E.Merck & Cois more exposedto Keytruda's LOE than consensus assumes in our view, with its diversification effortsunlikely to fully offset the pipeline gap; it trades at 7.8x FY26 P/E vs the 12.8x median.Modernaoffers modest growth (2.4% sales CAGR (24-29e)) and faces unclear COVID/RSV (Respiratory Syncytial Virus) demand and execution risk across its vaccine pipeline; thevaluation stands at 0.86x FY30 EV/revenue. BERNSTEIN TICKER TABLE INVESTMENT IMPLICATIONS Sanofi (Outperform; PT €124) In our view the stock is now back to above-pharma-sector growth (>10% 2024/2029e EPS CAGR) with good visibilitydriven by Dupixent, recently launched products, limited patent expiries and low exposure to the Inflation Reduction Act (IRA). •We also believe that improving visibility on the inflammation pipeline ex-Dupixent (where expectations are low) shouldalleviate concerns about portfolio concentration risk and thus expand the PE26 of 10x. •We expect further rerating to be driven by pipeline catalysts and refocus on pharma innovation (the consumer separation ison track) GSK (Outperform; PT 2,290 GBp) •Our 2031 sales forecast is double-digit percentages ahead of both the guidance and Bloomberg consensus due to HIV andthe pharma pipeline •In our view catalysts which should drive upgrades include the 2H25 relaunch of blockbuster Blenrep (blood cancer) and the2026 phase 3 pharmaceutical data readouts for camlipixant (recurrent chronic cough) and bepirovirsen (hepatitis B) •We also believe that the stock is too cheap as the current share price discounts a mid-single di