On December 11, the US Food and Drug Administration (FDA) approves the BNT162b2 vaccine against COVID-19, created by the companies Pfizer (NYSE: PFE) and BioNTech SE (NASDAQ: BNTX). This is the first vaccine approved by an American regulator. On the same day, Donald Trump announced the start of vaccinations in the United States.
Delivery of the drug will be handled by FedEx (NYSE: FDX) and United Parcel Service (NYSE: UPS). Vaccination with the drug will be carried out in two stages with an interval of three weeks. Side effects of the vaccine include fatigue, chills, headache, and muscle pain. The effectiveness of the drug reaches 95%.
The main problem in using BNT162b2 is its storage temperature, which should be below -70 degrees Celsius. As a result, Pfizer has developed innovative packaging and storage solutions.
The package includes GPS-enabled thermal sensors that track the location and temperature of each batch and respond in time to unwanted changes in the vaccine delivery process.
Market participants, as always, are interested in the question: how to make money on it. Both companies that developed the vaccine are listed on US exchanges. Accordingly, their shares can be considered as prime candidates for investment.
Pfizer is one of the largest vaccine companies in the world. The company supplies its drugs to 165 countries of the world and annually produces more than 200 million doses of vaccines. Pfizer is also the largest supplier of sterile injectables, producing over 1 billion sterile units per year. The company has manufacturing facilities in the US and Europe, which makes it easier for their medicines to enter the European market.
Pfizer shares have risen in price from 26 to 43 USD over the past 9 months. However, after the vaccine was approved by the regulator, papers began to fall in price. As a result, the price dropped by 14%. The rule “buy on expectations, sell on facts” worked. Investors began to take profits, which led to a fall in the value of securities, but now we can expect a second phase of growth, because the company will begin to grow income from sales of the vaccine.
U.S. government orders
Back in July, Pfizer and BioNTech signed an agreement with the US government to supply 100 million doses of the vaccine once it gets FDA approval. The government will be obliged to pay the companies 1.95 billion USD for this amount of the drug.
In December, vaccination of the US population began, and on December 23, it became known about a second agreement, according to which Pfizer and BioNTech must supply another 100 million doses. The entire volume of 200 million doses must be produced and delivered by July 31, 2021. The US government also reserved the right to order an additional 300 million doses of the vaccine.
The US population is 335 million. The minimum age threshold for vaccination with BNT162b2 is 16 years.
For the recent US presidential elections, information was provided on the number of people eligible to vote, which amounted to 239.2 million. Persons over 18 years of age are eligible to vote in the United States. Thus, the total population to be vaccinated is in the range of 250-260 million people.
Vaccination against COVID-19 is carried out in two stages with an interval of three weeks. As a result, at least 500 million doses are required for the entire US population at risk. It is this amount of the drug that appears in the agreements between the US government with Pfizer and BioNTech.
This fact points to high confidence in the BNT162b2 vaccine, although a week later the FDA approved another vaccine from Moderna (NASDAQ: MRNA), but it does not show such large volumes of orders.
Vaccine from Johnson & Johnson Inc and AstraZeneca Plc
To prevent the US government from being accused of bias in choosing a drug, it is planned to order the vaccine from companies Johnson & Johnson Inc (NYSE: JNJ) and AstraZeneca Plc (NASDAQ: AZN) after FDA approval, which is expected in February 2021. However, according to studies, their vaccine, called AZD1222, is around 70% effective, and in some cases, when the dosage is changed, 90%.
It is also noted that during the AZD1222 trials, a rare inflammatory disease, transverse myelitis, was recorded as a side effect. Whether the AZD1222 vaccine will be in the same demand as the BNT162b2 from Pfizer, time will tell, while the AZD1222 test results only remain.
Pfizer’s vaccine enters the European market
At the initial stage, Pfizer very successfully chose a partner for cooperation, which is the German company BioNTech SE. As a result, the vaccine from these companies became the first approved vaccine in Europe. And now it will be sold in 27 EU member states. An agreement has already been signed for the supply of 200 million doses of vaccine in 2021, as well as the opportunity to purchase an additional 100 million doses. The drug for European countries will be manufactured at BioNTech SE and Pfizer’s plant in Belgium.
After Pfizer merged with BioNTech SE on a vaccine, the latter’s papers began to correlate with Pfizer’s stock. But due to the fact that BioNTech SE is significantly inferior in size to Pfizer, the volatility in its securities was significantly higher.
BioNTech SE is a German biotechnology company that develops and manufactures immunotherapeutic agents for the treatment of serious diseases.
It was founded in 2008 by Ugur Sahin, Ozlem Tyurechi and Christoph Hubera, who are medical specialists and still work in the company.
In September 2019, BioNTech SE signed an agreement with the Bill & Melinda Gates Foundation to develop vaccines and immunotherapy for the prevention of HIV and tuberculosis.
For a long time, the company was known only in narrow circles. But that changed after she partnered with Pfizer to develop a vaccine against COVID-19.
At the moment, like most young biotech companies, BioNTech SE is unprofitable, but vaccine sales can dramatically change the situation for the better.
Since the beginning of the year, BioNTech SE shares have risen in price by 192%. Here, as well as in Pfizer shares, the last month there has been a drop in quotations associated with profit taking by investors. But securities continue to trade in an uptrend, as indicated by the 200-day moving average, and the current decline is seen as a correction.
Over the next few years, BioNTech SE will be backed by orders, which will increase its revenues. It is not excluded that the share price will also continue to rise gradually.
A new strain of coronavirus found in the UK threatens the effects of vaccines, research on which began in the spring of 2020.
The new virus strain is spreading faster than its predecessor. This can lead to the emergence of its next mutation, since the more the virus replicates, the more chances it has for this. And if the current vaccine can still cope with the detected strain, then its new mutations may be questionable and will require further tests.
Vaccine makers Moderna and Pfizer claim their drugs will be effective against new strains of coronavirus by targeting the spike protein that coats the outside of SARS-CoV-2. To circumvent this protection, the virus needs to change several segments of the protein at the same time, which is extremely unlikely and has never been observed when observing other viruses. Actual research shows that Pfizer’s vaccine is effective against approximately 20 different types of the virus.
Unfortunately, coronavirus can become a seasonal illness, which means that it will need to be vaccinated annually. This is very good for those who produce the vaccine, as these companies will be supplied with orders for a long time.
Of course, there will be more people producing the coronavirus vaccine over time and competition will increase. But for the next few years, Pfizer and BioNTech SE will hold the lead in this market. Accordingly, the shares of these companies can still bring profit to those who invested in them.
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