Vaccine Stocks Pop; But Does Anyone Care Anymore?

Vaccine stocks popped Wednesday on hopes Pfizer (PFE) and BioNTech (BNTX) will ask U.S. regulators to sign off on a fourth dose of their Covid shot.

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Pfizer Chief Executive Albert Bourla said Tuesday the company is reviewing studies, including one that looks at the impact of a fourth shot. In addition, Pfizer is working on a new formulation that could protect against multiple coronavirus variants, according to Bloomberg.

On today’s stock market, Pfizer stock rose 2.8% to 48.76. BioNTech stock surged 9.4% to 140.21. Moderna shares jumped 10.2% to 142.49. But that’s still not enough to reverse a months-long downtrend for vaccine stocks.

Simply put: Most Americans don’t view Covid as a priority. In the March IBD/TIPP Poll, just 9% of people surveyed cited Covid as a top issue in the U.S. That’s down from 24% in February and 33% in January as omicron chewed its way across the globe.

Vaccine Stocks: Now A ‘Show-Me’ Story

That viewpoint holds true across geographies, gender, race, education levels and ideologies. And it could certainly help explain the struggle for vaccine stocks this year.

After stout finishes in 2020 and 2021, vaccine stocks have broadly fallen in 2022. Moderna and BioNTech stocks are down 62% and 63%, respectively, after hitting peaks in November, as of Wednesday’s closing bell. Pfizer stock peaked in December and shares have since toppled 21%.

Nina Deka, a senior analyst with research firm Robo Global, says the pullback makes Moderna stock an attractive option. Moderna is part of the Robo Global Healthcare Technology and Innovation (HTEC) exchange-traded fund.

“The reality is that mRNA (messenger RNA) therapeutics are here to stay,” she said in an email to Investor’s Business Daily. “Moderna, with its rich pipeline and fully digitized AI-enabled R&D (research and development) process, is the technology leader in mRNA.”

Bearishly, analysts don’t predict strong sales for any of the vaccine stocks as Covid becomes an endemic disease. Analysts polled by FactSet expect Moderna sales to top out near $22 billion this year. Then, they expect sales to plunge by almost half in 2023.

In fact, Moderna’s sales growth isn’t expected to reaccelerate until 2025. That’s when Moderna expects to begin testing 15 new vaccine candidates in humans. But Moderna won’t see sales of those products, if successful, for years. Drug testing takes time. Moderna’s latest-stage efforts in non-Covid diseases are vaccines for respiratory syncytial virus and cytomegalovirus.

Deka also notes Moderna is working on a flu vaccine, which could be paired with its Covid shot. In the long term, the company is also exploring treatments for cancer and cardiovascular diseases.

Economy Leads As Top Priority

Analysts expect BioNTech’s sales to have already peaked at nearly $19 billion in 2021. BioNTech will report its fourth-quarter earnings on March 30. Vaccine stock analysts expect sales to fall to $17 billion this year before tumbling in subsequent years. They don’t predict a reacceleration in sales until 2026.

Outside of Covid, BioNTech’s most advanced efforts are in cancer. It partners with Sanofi (SNY) and Roche‘s (RHHBY) Genentech.

Pfizer is expected to be on a similar trajectory. Analysts expect sales to hit a high point north of $106 billion this year, before diving to $80 billion in 2023 and then slowly declining in future years as sales normalize below $70 billion annually.

On the priority list, Covid lands fourth in the IBD/TIPP Poll for March — a bearish point for the trio of vaccine stocks.

Top priorities, according to those surveyed, are the economy, national security amid the war in Ukraine and lack of trust in government/politicians. A quarter of people cited the economy as the top issue, followed by 24% and 11% for Ukraine and governmental trust, respectively.

Follow Allison Gatlin on Twitter at @IBD_AGatlin.

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