Can Pfizer and Moderna vaccines defeat new strains of coronavirus?

Investors in Pfizer (NYSE: PFE) and Modern (NASDAQ: ARNM) may have heaved a sigh of relief when the U.S. Food and Drug Administration granted emergency use approval for companies’ coronavirus vaccines in December. The risk of failure in clinical trials was in the rearview mirror. Companies have started to ship doses of vaccine for administration. The revenues from their contracts with governments were just around the corner.

And then another risk appeared: new variants of the coronavirus. In the past few weeks, new strains have emerged: a strain found in the UK, one that started in South Africa, and more recently new strains in Japan and Columbus, Ohio. Now the big question is whether the Pfizer and Moderna vaccines can protect against these new versions of the coronavirus. Let’s take a closer look at what we know so far.

Focused on the tip

Let’s start with a little overview of the virus itself, vaccines, and variants. The coronavirus contains a “spike protein”. They are literally spikes on the surface of the virus that allow it to attach to cells and infect them. Vaccine makers are focusing on this peak. In the cases of Pfizer and Moderna, their vaccines contain instructions for the body to make a copy of this spike protein. Then the body produces antibodies to fight it off. That way, if the real coronavirus does appear, this army of antibodies will recognize it and attack it.

The newly discovered coronavirus variants each contain genetic mutations or changes. And in each variant, the changes affect the spike protein. So now the question is, with these changes in the spike protein, will these antibodies still recognize it?

So far, the situation looks positive for Moderna and Pfizer. Moderna said his vaccine includes all of the sequence needed to make the spike protein. This represents 1,273 amino acids. The new variants include around eight changes in the spike protein amino acids. Overall, this means that the “new spike protein” is about 1% different from the original coronavirus spike protein – the one encoded in Moderna’s vaccine. The company is testing its vaccine against the new variants but hopes the vaccine will prove to be effective.

Moderna and Pfizer both comment

Moderna says that if he were to eventually update his vaccine, the process would not require large clinical trials, according to an article in the MIT Technology Review. So an updated vaccine could go from the drawing board to the market in a few months as long as regulators give it the green light.

As for Pfizer, the company recently performed an in vitro test against a mutation in the new strains linked to rapid transmission. The company said the antibodies of people vaccinated neutralized the British and South African strains. However, the test did not include all the mutations of the new variants. Pfizer said more data was needed to confirm the vaccine’s effectiveness against the new strains. The company also said that if new mutations ultimately cause the vaccine’s effectiveness to decline, updating the current vaccine would not be a problem.

What does all of this mean for investors?

Right now, the new strains are probably one of the biggest risks for coronavirus vaccine companies – and their performance in stocks. So far, it looks like the Pfizer and Moderna vaccines can handle the new strains. But that doesn’t mean it will be true for the additional strains.

The good news is that the possibility of a vaccine-resistant variant doesn’t mean that all the hard work of companies will be abandoned. As Moderna and Pfizer said, updates are possible. And this process is not new. Researchers regularly update the flu vaccine to add new strains.

Yet, this is not an ideal situation during a pandemic and after companies have already ramped up production of their original vaccines. This is bad news from a cost and logistics perspective.

Of course, we are not there yet. And that scenario may never happen. But if you own shares of vaccine makers or are planning to buy any, this is something to watch with special care.