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Moderna Falls After Biden Remarks

Plus500 | Tuesday 20 September 2022

After last week’s stock surge, American pharmaceutical and biotechnology company Moderna (MRNA) took a turn for the worse. On Monday, the healthcare mogul slipped by 7.14%. US President Joe Biden's latest remarks coupled with a generally ailing and inflationary economy could be the culprits behind Moderna’s gloomy turn of events.


Moderna: A Quick Recap 

The success obtained by Moderna in 2021 during the outbreak of the COVID-19 pandemic was irrefutable as the company’s value climbed by over 330% from January 2021 up to August 2021. Moderna’s astonishing ascent may have made it one of the most prominent and substantial COVID-19 vaccine companies.  However, with the virus’ effects dwindling and as fewer infection cases materialize, the company, perhaps logically, lost some of its luster over the past year as it slipped by 45% as of the time of the writing. 

Nonetheless, despite the biotech giant’s evident overall drop in the past few months, last week, Moderna seemed to be climbing the ladder of success yet again. On the 14th of September, Moderna’s CEO, Stephane Bancel, unraveled a possible deal with China in which it would provide COVID vaccines for the world's largest population. Whereas the rest of the world may seem heavily dependent on Moderna and its rival, Pfizer’s vaccines, China took a different route. The world’s most populous nation has received its shots from Chinese-made vaccines.  Accordingly, the news of this possible collaboration may have raised suspicions regarding the success of China’s existing vaccinations and also surged Moderna’s stock price as it rose by 6.1%. Having dropped significantly in the past year, a deal like this could boost the company’s stock price according to some market analysts and may provide the comfort Moderna traders and investors seek.  (Source:Brannon’s)

Biden, Moderna, and Pfizer

Despite the hopeful uptrend observed last week, yesterday, investors seem to have turned their heads away from Moderna. In a controversial interview, US President, Joe Biden declared that, on the one hand, he thinks that the US still has a problem with the pandemic, and on the other hand that “the pandemic is over.”  This perhaps oxymoronic statement caused a stir in the trading sphere.  Many traders may have shied away from Moderna this week causing the stock to tumble by 7% yesterday. Biden’s questionable words may be surprising to some due to the fact that though the US death toll dropped significantly, it still stands at hundreds per day. In addition, last week, the World Health Organization (WHO) stated that COVID still warrants an “acute global emergency”. Biden’s statement was also not received well by some health experts who warned that he may be getting ahead of things.  In addition to the aforementioned factor, according to some market watchers, this drop may have also been driven by investors’ cautiousness regarding a possible rate hike by the Fed which is expected to be announced on Wednesday. (Source:The Guardian)

Moreover, Biden’s statement also sent ripples across other biotech companies including Moderna’s own competitor Pfizer (PFE). Pfizer, one of COVID’s biggest winners, slid by 1.2%. This less dramatic fall in Pfizer’s stock in comparison with Moderna could be counteracted by the fact that the company reported solid revenue and earnings growth driven by the COVID-19 product line and other products. Whereas Pfizer’s Q2 2022 earnings beat Wall Street estimates, Moderna’s earnings despite beating estimates, were a tad less optimistic. In addition, yesterday, Pfizer also reported positive results from its E.U. Phase 3 vaccine study which aims to prevent invasive pediatric diseases. Pfizer may also be able to use this as a beacon of hope, one that transcends Coronavirus and demonstrates its potential beyond it. 

What’s Next?

What’s next for Moderna and the biotech industry is still uncertain. Nevertheless, despite the recent slumps, some market analysts posit that while interest in COVID vaccines may ebb and flow, it is still highly unlikely that governments and health organizations will stop using Moderna’s products. In addition, whereas Biden seems to hold a less negative stance towards COVID, other countries like China, for example, do not. Therefore, on a global scale, a conclusive decision regarding the trajectory and status of COVID cannot be reached which means that the future of Moderna’s stock is uncertain; it may be hopeful or it may not be.

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