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Vaccine Stocks Down After Biden Says Pandemic is Over

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The stocks of companies making COVID-19 vaccines and medicines declined on Monday after U.S. President Joe Biden said that the pandemic is over in the United States in an interview over the weekend on “60 Minutes” on CBS News.

BioNTech (BNTX - Free Report) , Moderna (MRNA - Free Report) and Novavax (NVAX - Free Report) stocks declined 8.6%, 7.1% and 6.5%, respectively. Pfizer (PFE - Free Report) , BioNTech’s partner, declined around 1.3%.

The President said that though there was still a problem with COVID and a “lot of work” was going on for that, the pandemic was over. He said that the fact that no one is wearing masks suggests the pandemic is over in the country.

However, public health officials still consider the pandemic a health emergency and warn of a possible surge in infections in the fall and winter months. Thousands of people are being infected from the virus every day. Death rates from COVID are more than 400 per day, which though significantly down from a peak of more than 3,000 in late January 2021 and 2,600 in February 2022, are still quite high. Recently, the FDA granted emergency use authorization (EUA) to Pfizer/BioNTech and Moderna’s Omicron BA.4/BA.5-adapted bivalent vaccines for use as a single booster dose.

These “updated boosters” contain an mRNA encoding the spike protein present in the original vaccine as well as an mRNA encoding the spike protein that is common in the Omicron subvariants, BA.4 and BA.5, the most prevalent variants of concern in the United States as of now. Pfizer/BioNTech and Moderna developed the Omicron BA.4/BA.5-adapted bivalent vaccines at the FDA’s recommendation a couple of months back. The current vaccines weren’t very effective against the BA.4/BA.5 subvariants.

However, the pace of new hospitalizations has slowed down. Though the World Health Organization still considers COVID-19 a pandemic, its director general Tedros Adhanom Ghebreyesus said last week that the world is in a better position to end the pandemic. He went on to say that the end of the pandemic was in sight.

Stocks of Moderna, BioNTech and Novavax declined as their sales and profits will fall once the pandemic ends. This is because COVID-related vaccines and products were their only top-line drivers. The stocks of BioNTech and Moderna have risen almost 300% and 400%, respectively since March 2020 when the pandemic started.

In fact, pharma giant Pfizer’s stock too was hurt by Biden’s comment as its COVID-19 vaccine and antiviral, Paxlovid accounts for almost half its revenues. Pfizer and Moderna were expecting the “updated” boosters to be their key revenue drivers for the next few quarters. If the pandemic ends, the demand for COVID-19 vaccines and other medicines will decline, which will significantly hurt these companies’ sales and profits.

The companies will soon need to find new top-line drivers to fuel their long-term growth. Moderna, Pfizer and BioNTech have seen a major influx of cash from their vaccine/medicine sales. They can use the cash for more research and can successfully develop new products to make up for lost revenues from COVID products.

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