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How Are Pfizer, BioNTech, and Moderna Grappling With Omicron?

Plus500 | Tuesday 30 November 2021

News of the spreading COVID-19 Omicron variant has been rattling financial markets across the world this week. As indices drop and then pick back up with the headlines, investors may be wondering how major biotechnology firms plan to respond to this latest health crisis.

Vaccine

Moderna Looks Ahead

On Sunday, Moderna’s (MRNA) chief medical officer, Paul Burton shared in a BBC interview that despite his company’s remarkable ability to quickly mass-manufacture vaccines, it could take until early next year before a further booster shot, formulated to fight the Omicron strain, will be widely available. Moderna could begin clinical testing of a new formula within two to three months from now.

According to Burton, it may be a few weeks before we know if current vaccines are effective against this newest variant. Although Burton refrained from making predictions about current vaccines’ effectiveness, Moderna’s CEO was more open about what he foresees for the coming weeks.

On Tuesday the 30th, Moderna CEO Stéphane Bancel shared his doubts regarding the current coronavirus vaccine’s effectiveness against the new Omicron variant. In his Financial Times interview, Bancel predicted that it could take vaccine manufacturers up to several months to come up with a formula capable of protecting the vaccinated against Omicron as well as current vaccines do against Delta. The reasons for this gloomy outlook on Moderna’s part are the high mutation rate of this newest COVID-19 strain, as well as the speed of its spread across Africa, where vaccination rates are generally lower than those in Europe or North America.

Bancel’s pessimistic remarks deeply contrast with U.S. President Joe Biden’s attempts to calm the American public; on Monday, he assured his citizens that further lockdowns or shutdowns were not in the cards. Biden’s chief medical officer, Dr. Anthony Fauci, stressed that the United States should be prepared to take any and all measures to battle Omicron’s spread. 

Although the stock markets had a strongly negative reaction to news of Omicron’s spread last Friday, this latest epidemiological development may be boosting Moderna’s share value. On Monday, its stock price jumped by nearly 11.8%. 

Traders may be buying Moderna shares in the hopes that a new proprietary vaccine formula will raise the firm’s stock even further, in a repeat of the company’s 6,000% rise in revenue from Q2 2020 to Q2 2021. All in all, Moderna’s rise over the past year has been meteoric, although there have been highs and lows along the way. The firm’s share price hit a record high of nearly $500 per share in August amid the spread of the Delta variant, but also saw a steep drop of more than 50% by early November of this year, perhaps due to continuing supply chain issues.

Pfizer Shares Outlook

In contrast to Moderna’s stance, Pfizer’s (PFE) Chief Executive Officer, Albert Bourla, expressed a rosier view of current medical options’ chances of effectively dealing with Omicron. Pfizer’s treatment pill for those already infected by the coronavirus, Paxlovid, has been shown to reduce hospitalisation rates by nearly nine-tenths when combined with HIV medication; Bourla believes that Paxlovid will help those infected by the Omicron variant as well. Although the USA’s Food and Drug Administration has yet to authorise the pill for emergency use, the Biden administration has already secured 10 million Paxlovid courses out of a total 80 million expected to be manufactured by Pfizer.

In his CNBC interview on Monday, Bourla further shared that he does not believe that Pfizer’s current two-dose vaccine will be shown to be ineffective against Omicron; rather, he sees a greater likelihood of reduced effectiveness. However, the biotech firm has already begun the initial stages of developing an Omicron-specific vaccine, which it expects to have ready within one hundred days. Bourla emphasised that Pfizer also prepared specific shots for the Beta and Delta variants of the COVID-19 virus, but they were rendered superfluous by the original vaccine’s continued efficacy. 

Last Friday, Pfizer shares jumped by over 6%; however, they dropped by 3% over the course of the trading day Monday, wiping out almost half of last Friday’s gains. Much like Moderna, Pfizer had a tumultuous 2021 as well. Pfizer’s share value hit a high of nearly $52 on August 18th, but had dropped to below $42 by mid-October. Although Pfizer’s stock has regained its earlier high, no one can be sure whether its momentum can be sustained.

BioNTech Rides Upward Wave

German firm BioNTech (BNTX), which partnered with Pfizer in the development of its vaccine, also saw its stock value shoot up as Omicron headlines spread across the globe. Last Friday, BioNTech shares jumped by over 14%, with a further 4% rise on Monday. BioNTech affirmed Pfizer’s remarks that an Omicron-specific vaccine could be ready within one hundred days, and that preliminary development has already begun.

As Omicron continues to spread, it is as yet unclear whether current vaccines will continue to provide effective protection against coronavirus infection. Although market watchers may have an eye on biotech firms as COVID-19 captures the global news cycle yet again, it is simply not yet known whether this latest infectious strain will boost their share prices going forward.


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