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(Bloomberg) – For the world’s leading manufacturers of Covid-19 vaccines, the news that Merck & Co.’s experimental pill halves the risk of hospitalization and death was the latest blow in a very bad week.
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Stocks such as Moderna Inc. and BioNTech SE lost around $ 84 billion in combined value this week following a stock market meltdown that sent both companies to their lowest level since July.
Sales picked up on Friday, with BioNTech and Moderna each declining as much as 16% in New York City as Merck broke news of its experimental pill that Wall Street called a “game changer.” The drug, called molnupiravir, reduced the risk of hospitalization or death by 50% in one study, raising concerns about the long-term earnings of companies providing vaccines.
“You have news of a new player entering the market with a much less rigorous treatment and which alone must amortize the day for the rest of the field whether it is vaccines or drugs administered in the hospital for Covid-19, “said Jared Holz, general manager of health actions at Oppenheimer & Co.” Vaccine revenue numbers over the next few years are expected to decline. “
Wall Street analysts had predicted Moderna’s Covid-19 vaccines would bring in more than $ 20 billion in sales this year, before falling to $ 6.1 billion by 2025.
Not finished yet
Despite this week’s liquidation, vaccine stocks remain among the best performing in biotechnology since the start of the pandemic. Moderna shares have risen 1,590% since the start of 2020, while BioNTech and its counterpart Novavax Inc. have posted equally impressive gains of 600% and 4,000%, respectively.
Not all investors see Merck’s breakthrough in Covid-19 as a reason to avoid all vaccine manufacturers. The pandemic is far from over, argues Brad Loncar, CEO of Loncar Investments.
“Time and time again we have seen that taking positive news quickly thinking it means the pandemic is over has been wrong every time,” he said by phone. “I don’t think this will hurt vaccine makers as much as a quick reaction maybe.”
Sales extended beyond vaccine stocks and biotech companies. Companies that have developed or are working on antibody treatments for Covid-19, and closely watched exchange-traded funds like the iShares Biotechnology ETF, have also fallen.
Here’s how some of them fared on Friday:
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BioNTech and Moderna each crash down to 16% at their lowest since July
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Novavax fell 26% while its vaccine counterparts sank: CureVac -16%, Arcturus Therapeutics -10%, Inovio Pharmaceuticals Inc. -8.9%
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Companies with antibody treatments for Covid: Adagio Therapeutics Inc. -42%, Vir Biotechnology Inc. -24%, AbCellera Biologics Inc. -14%, Regeneron Pharmaceuticals Inc. -8.1%
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IShares Biotechnology ETF drops to 4.1%, highest since end of March
The broader healthcare sector fell four for the fifth time in the past six sessions on Friday, as life science toolmakers and medical device companies underperformed the broader market. The 5% drop in the S&P 500 healthcare index this week is the group’s worst week since October 2020.
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