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Hopes that the pandemic can end by next year have put pressure on stocks that depend entirely on vaccine revenue.
Apu Gomes / AFP via Getty Images
Inventories of vaccine manufacturers fell on Friday after
Merck
announced that its Covid-19 oral antiviral pill reduced the risk of hospitalization or death by approximately 50%.
As the good news from Merck paves the way for turning the page on the pandemic, it has fueled fears that demand for Covid-19 vaccines will decline in the coming months, impacting vaccine manufacturers and biotechnology companies developing their own Covid-19 treatments.
Actions of the vaccine developer
Novavax
(ticker: NVAX) slipped 17% in Friday trading, and competing
CureVac
The share (CVAC) fell 15%.
Modern
Shares (MRNA) were also affected, dropping 13% despite Thursday’s announcement that the Food and Drug Administration was likely to allow a booster dose of the company’s vaccine. Shares of Merck (MRK), on the other hand, rose almost 10%.
“We view this news as consistent with our expectation that the absolute size of the end-market COVID vaccines will shrink faster than consensus predicts, as weaker end-user demand responds to the flow of vaccine manufacturing volume. hitting the market in 2021 and beyond. SVB Leerink analyst Mani Foroohar wrote in a research note.
Some analysts believe that market fears may be unwarranted. Jefferies analyst Michael Yee doesn’t think the news from Merck will have a material impact on the larger picture of vaccine demand, because “global vaccines must prevent getting sick to begin with,” he said. written in a note on Friday.
The greatest risk may relate to companies producing antibody-based treatments, as Merck’s oral pills are more easily dispensed and can be easily administered outside of a hospital.
Regenerate
The share (REGN), which produces monoclonal antibody therapy, was down 5.6% on Friday.
For biotechnology
(VIR), who was developing antibody therapy with
Glaxo
,
experienced a 22% drop.
Hopes that the pandemic could end by next year have put pressure on stocks that depend entirely on vaccine revenue this week. Foroohar considers Moderna particularly vulnerable as the company’s other programs are in their early stages or face stiff competition from well-established products in the market.
The leaders of
Pfizer
(PFE), Modern and
BioNTech
(BNTX) said in recent interviews that the pandemic could end, or at least become manageable, within a year.
“The most likely scenario for me is that, because the virus is spreading around the world, it will continue to see new variants coming out,” Pfizer CEO Albert Bourla said in a Sept. 26 interview with ABC. “We will also have vaccines that will last at least a year, and I think the most likely scenario is annual vaccination.”
Bourla’s comments come as government health officials debate the need to approve vaccine recalls. The CDC and the FDA have approved booster shots from Pfizer and BioNTech for people who are immunocompromised and those over 65. CDC director Rochelle Walensky further expanded access to people in high-risk work settings, canceling a panel that initially opposed it.
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