A few weeks ago, leading Covid-19 vaccine manufacturers adjusted their sales expectations for this year's updated booster shots and announced spending cuts in their vaccine operations. However, recent upticks in Covid hospitalizations in the U.S. have raised concerns among investors and refocused attention on the virus.
While it's still too early to determine whether this heightened worry will result in higher-than-expected sales of the new Pfizer, Moderna, and Novavax boosters set to launch soon, investors are already expressing their opinions. Moderna stock has seen an 18% increase since August 15, recovering from a 46.3% decline since the start of the year. Similarly, shares of Pfizer's partner BioNTech have risen by 14.2% over the past week, and Novavax stock has experienced an 18.6% increase. Pfizer shares have also seen a modest growth of 3.7%.
During midday trading on Tuesday, Moderna and BioNTech saw further gains of 3.3% and 3.4%, respectively. Novavax experienced a significant jump of 13.3%, while Pfizer's stock declined by 0.7%.
However, some experts on Wall Street remain skeptical about these stock movements and question whether there will actually be an increase in vaccine administration.
Jared Holz, a healthcare equity strategist at Mizuho, wrote in an email to institutional investors that relying on the current climate to boost vaccine usage throughout the rest of the year might be overly optimistic for major vaccine companies. He viewed the recent stock gains for Moderna and BioNTech as short-term trades based on their weak performance so far this year.
Colin Bristow, an analyst at UBS, also maintained a pessimistic stance on Pfizer's Covid vaccine and antiviral despite the increase in hospitalizations, stating that it has done "little to change" his overall bearish view.
The rise in Covid hospitalizations within the U.S. has undeniably attracted renewed attention to the virus.
COVID Hospitalizations Increase in the United States
According to a recent report by the Centers for Disease Control and Prevention (CDC), there has been a 21.6% increase in COVID hospitalizations compared to the previous week, with a total of 12,600 people hospitalized in the week ending on August 12. While this number is still lower than previous points before spring, it is concerning as it indicates a rise in cases.
Vaccines and Variants
As pharmaceutical companies prepare to launch updated vaccines pending approval from the FDA and CDC, there is hope that these new vaccinations will help combat the spread of the virus. The current variant makeup in the U.S. seems to be a good match for the vaccines available. The main variant causing most cases is EG.5, which the vaccines were designed to target. Both Moderna and Pfizer have stated that their boosters are effective against EG.5.
However, a new variant called BA.2.86 is causing concern and is being closely monitored by the World Health Organization. Dr. Scott Gottlieb, a former FDA commissioner and current Pfizer board member, has described this variant as highly mutated and genetically different from Omicron.
Potential Impact on Vaccine Demand
The recent increase in COVID cases raises questions about whether the demand for vaccines could substantially change. The CDC has not yet recommended who should receive the vaccine, and it is possible that they may limit their recommendation to older adults. The timing of the agency's recommendation has not been announced.
According to Oppenheimer analyst Hartaj Singh, if COVID poses a greater threat than anticipated, Moderna could benefit the most. Singh points out that Moderna is well-prepared for the commercial market, has robust clinical data, and possesses a better mRNA transportation/storage profile compared to its competitors.