America and the rest of the world is getting ready for a vaccine that will help protect public health against the COVID-19 pandemic. The societal impact of the coronavirus has changed many lives, and it has led to more than 6 million cases and over 184,000 deaths in the United States alone. The coronavirus has wrecked the economy, led to millions of layoffs and furloughs, closing down countless businesses and impacted millions of Americans paychecks who are still working. If a vaccine is approved the economic impact will be countable in the trillions of dollars.
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While 24/7 Wall St. has been tracking the COVID-19 outbreak with its own maps and its own data for months, the stock market surged again on Wednesday and the S&P 500 and NASDAQ both hit new all-time highs. There are many issues which drive stocks higher, and the stock market has been lining up bets that a COVID-19 vaccine is going to arrive. The question is now becoming to “When” rather than “If” a vaccine gets approved.
Multiple biotechnology and pharmaceutical corporations are seeking fortunes to get a vaccine and treatment out to win the war against COVID-19. As of this week, there are now three companies leading the fight with vaccine studies in Phase III trials. News on Wednesday was out that the Center for Disease Control and Prevention (CDC) has notified public health officials in all 50 states to prepare to distribute a coronavirus vaccine as soon as late in October or at the start of November.
As a result of this news and based on three studies having entered late-stages, the stock market is making bets on which of the vaccine leaders is going to get approval first. First and foremost, there is no assurance at all that an the U.S. Food & Drug Administration (FDA) is going to approve any of these three vaccine candidates. There are also no assurances that these three Phase 3 trials are going to be a success. And one more consideration is that the CDC’s first distribution appears to be targeting healthcare workers and high-risk groups first.
All three of the furthest-along vaccine candidates appear to have some serious benefits in creating antibodies to help prevent COVID-19. There are also many debates and many differing opinions about how effective and how safe these vaccines will actually be. And while it may be weeks or months before approval can be awarded, it could take even longer before availability is widespread.
It is far too early to make any predictions about which of the Phase 3 trials will win approval first, and again IF they get approval at all, but the stock market’s bets as of Wednesday seem to be favoring the Phase 3 from Moderna, Inc. (NASDAQ: MRNA) and the Phase 3 under Pfizer Inc. (NYSE: PFE) and BioNTech SE (NASDAQ: BNTX) over the newly-started Phase 3 under AstraZeneca PLC (NYSE: AZN). Making this statement is absolutely not meant to be a prediction at all, but it’s an observation of the known data today.
And here is how the stock market bench-marked its bets on Wednesday. There was a 0.94% gain on AstraZeneca’s ADSs to $55.90, still down from a 52-week high of $64.94. Shares of Moderna closed up 2.2% at $64.72. BioNTech’s share price rose 7.2% to $61.99 and Pfizer’s stock rose by about 0.9% to $37.20. Pfizer’s market cap is the largest of the lot at $206 billion, followed by AstraZeneca’s ADSs valued at about $150 billion. BioNTech is valued at close to $14.7 billion and it has only been listed in the U.S. since October of 2019, and Moderna has a $25.5 billion value and has been public only since the end of 2018.
It is also urgent for investors to consider that other public companies are still in the running, and it’s widely expected that the global market has room for multiple COVID-19 vaccines. There may also be a need for the public to be vaccinated more than once, and it’s very possible that there could be a recommendation that multiple vaccines taking different tracks to prevent or treat COVID-19 will be needed.
As a reminder, the FDA has laid out that it will not approve a COVID-19 vaccine or treatment if it is not proven to be effective, but the FDA has also laid out the path that could lead to an even more rapid approval if the data make it approvable. China and Russia have already indicated that they would begin their vaccines ahead of the traditional approval process.
Here is how the data stacked up as of this week for each company.
Moderna
Moderna Inc. (NASDAQ: MRNA) recently announced that its COVID-19 vaccine candidate (mRNA-1273) is showing signs of working and inducing an immune response in adults aged 56 and older at similar rates to in younger patients. Moderna is one of five biotech or pharmaceutical stocks that have been selected under Operation Warp Speed to develop a COVID-19 vaccine, and its existing Phase 3 clinical trial is being analyzed for its efficacy to prevent infection of COVID-19. The U.S. government recently gave an order, subject to the vaccine being approved of course, to purchase 100 million initial doses of the vaccine candidate for a sum of up to $1.525 billion.
Moderna’s stock has been the subject of many analyst reports calling for substantial upside, but a recent patent ruling within the United States went in favor of Arbutus Biopharma Corp. (NASDAQ: ABUS), which may have implications for Moderna’s coronavirus vaccine front-runner status. The U.S. Patent Trademark Office ultimately rejected arguments made by Moderna that an Arbutus patent should be revoked because it described obvious concepts. This patent relates to lipid nanoparticle technology that allows the human body to make its own therapeutic proteins.
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