Croda International PLC (LSE:CRDA)’s polar lipids, supplied to pharmas such Pfizer for its Covid vaccine, are worth more than gold according to research from Berenberg.
Analysing data from the FDA, the US’s medicines regulator, the broker estimates the price in Covid vaccines US$160,000/kg, but still only account for a fraction of the total cost.
“Polar lipids are used to make the lipid nanoparticles that encapsulate and transport the RNA in the COVID-19 vaccines used by Moderna and Pfizer-BioNTech “ explains the broker.
“The lipids will be the primary means of transporting therapeutic RNA within the body for treatments beyond COVID-19 vaccines, be they cancer drugs or new vaccines against diseases such as flu.
“In 2021, Croda will make around US$200m of sales of polar lipids related to COVID-19 vaccines, primarily that of Pfizer-BioNTech.”
Fears over competitive displacement are overdone, suggest the broker especially with mRNA-based treatments tipped to be used across a wide range of medicines in future years.
“Croda is best placed in terms of portfolio breadth, scope for customisation and relations with researchers/commercial customers,” Berenberg adds, with a price target of 94p and buy recommendation.