On December 11th,
the US Food
and Drug Administration approved BNT162b2,
the vaccine against COVID 19, developed by
Pfizer (NYSE: PFE)
and BioNTech SE (NASDAQ: BNTX). It is
the first vaccine to have been approved by
the American regulator. Later on
the same day, US President Donald Trump announced
the start of vaccination in
the USA <a name=\'more\'></a> .
The medication will be delivered by FedEx (NYSE: FDX)
and United Parcel Service (NYSE: UPS). The vaccination procedure will be carried out in two stages three weeks apart from each other. Possible side effects are fatigue, shivers, headaches,
and muscular pain. The medication has proved to be 95% effective.
The key problem in using BNT162b2 is its storage temperature, which must be below -70 degrees centigrade. Due to this,
Pfizer developed innovative solutions in packaging
and storing
the medication.
The package includes temperature-sensing elements with GPS support, which allow to track
the location of each batch
and timely respond to any adverse changes in
the vaccine delivery process.
As usual, market players are wondering – how can we make money on this? Both companies that developed
the vaccine are traded on American stock exchanges
and their shares may be considered as a “front-runner” for investments.
Pfizer Inc.
Pfizer is one of
the world’s biggest companies, which develops vaccines. The company supplies its medications to 165 countries
and produces over 200 million vaccine doses every year. Also,
Pfizer is
the biggest supplier of sterile injection drugs
and produces more than a billion of them a year. The company has manufacturing facilities in
the USA
and Europe, that’s why its medications have no problems with accessing
the European market.
Over
the last 9 months,
Pfizer shares have risen from $26 to $43. However, after
the American regulator had approved
the vaccine, shares started getting cheaper
and finally dropped 14%. “Buy
the rumor, sell
the fact”, pure
and simple. Investors started taking profit
and that resulted in
the depreciation of shares. However, at
the moment shares are expected to rise again because of
the company’s profit from
the vaccine sales.
Pfizer Inc.
US Government orders
As far back as July,
Pfizer and BioNTech entered into an agreement with
the US Government to supply 100 million doses after
the vaccine was approved by
the FDA. The government was to pay
the companies $1.95 billion.
The vaccination of
the American population started in December
and on December 23rd, they announced
the second agreement, according to which,
Pfizer and BioNTech had to supply an additional 100 million doses. The total amount of 200 million vaccine doses must be produced
and supplied by July 31st, 2021. In addition to that,
the US Government reserved
the right to order 300 more million doses.
The American population is 335 million people,
the minimum age threshold for a vaccination with BNT162b2 is 16.
By
the time of
the latest presidential elections, they published information about
the number of people, who have
the right to vote – 239.2 million. As a result,
the total number of citizens to be vaccinated is about 250-260 million people.
The vaccination procedure against COVID-19 will be carried out in two stages three weeks apart from each other. Totally,
the entire high-risk American population will require at least 500 million doses. This is exactly
the number which is described in
the agreements between
the US Government
and Pfizer and BioNTech.
This indicates a special trust in BNT162b2, although a week later
the FDA approved one more vaccine, produced by Moderna (NASDAQ: MRNA). However, there were no such big orders here.
Vaccine from Johnson & Johnson Inc
and AstraZeneca Plc
In order to avoid accusations of bias towards some particular medication,
the US Government is planning to order another vaccine from Johnson & Johnson Inc (NYSE: JNJ)
and AstraZeneca Plc (NASDAQ: AZN) after approval by
the FDA, which is expected in February 2021. However, according to research,
the effectiveness of their vaccine called AZD1222 is about 70%,
and in some cases, upon changing a dosage, 90%.
It is also reported that one of
the side effects found during
the trial period of AZD1222 was a rare inflammatory disease, transverse myelitis. It remains to be seen whether
the demand for AZD1222 will be
the same as for BNT162b2 from
Pfizer – all we can do now is wait for
the final results of testing AZD1222.
The
Pfizer vaccine on
the European market
In
the early stages,
Pfizer made a very wise move in choosing a partner for cooperation, which turned out to be a German company called
BioNTech SE. As a result,
the vaccine developed by these companies became
the first one to have been approved in Europe. Soon, it will be sold in 27 countries, members of
the European Union. The parties have already signed an agreement to supply 200 million vaccine doses in 2021
and the opportunity to order an additional 100 million. In European countries,
the medication will be manufactured on facilities owned by
BioNTech SE
and a
Pfizer factory in Belgium.
BioNTech SE
After teaming up with
Pfizer to work on
the vaccine,
BioNTech SE found its shares correlating with Pfizer’s. However, since
BioNTech SE is significantly smaller than Pfizer, its shares were much more volatile.
BioNTech SE is a German biotechnological company, which is involved in
the development
and production of immunotherapeutic agents for treating grave diseases.
It was established in 2008 by Uğur Şahin, Özlem Türeci,
and Christoph Huber, who are medical professionals
and still working in
the company.
In September 2019,
BioNTech SE signed an agreement with
the Bill & Melinda Gates Foundation to develop vaccines
and immunotherapeutic procedures for AIDS
and tuberculosis.
For a long time,
the company was known only in certain circles. However, everything changed after it started collaborating with
Pfizer in
the development of
the COVID-19 vaccines.
At
the moment,
BioNTech SE is a loss-making company, just like a lot of other young biotechnological companies but vaccine sales may dramatically change things for
the better.
Since
the beginning of 2020,
BioNTech SE shares added 192%. Here,
the situation is similar to Pfizer:
the price was falling in
the previous months because investors were taking a profit. However,
the major trend is ascending, which is confirmed by
the 200-day Moving Average, that’s why
the current decline should be considered as a correction.
BioNTech SE
BioNTech SE will have enough orders for
the next several years, that’s for sure, thus increasing its profits. Possibly,
the company’s shares will also continue rising slowly.
Risks
A new coronavirus strain found in
the United Kingdom puts
the effectiveness of vaccines, which have been developed since
the spring of 2020, in jeopardy.
This new strain is spreading faster than
the initial one
and that may lead to
the appearance of another mutation because
the quicker it replicates
the more opportunities to mutate it has. And if
the vaccine from
Pfizer and BioNTech SE can beat
the new strain, then other mutations may be rather questionable
and will require additional tests
and trials.
Moderna
and Pfizer insist that their medications will be effective in fighting
the new coronavirus strain (and others in
the future as well) because they are going for a spike protein on
the surface of SARS-CoV-2. In order to bypass such “armor”,
the virus has to change several protein segments simultaneously, which is highly unlikely
and has never occurred with
the other viruses.
Factual research says that
the vaccine by
Pfizer and BioNTech SE may be effective against 20 different versions of
the virus.
Closing thoughts
Unfortunately,
the coronavirus may become a seasonal disease, which means that onу may need to vaccinate every year. It’s very good for those who manufacture
the vaccine because these companies will be secure with new orders for a long time.
Of course, sooner or later there will be more
and more companies that develop
and manufacture vaccines against
the coronavirus, hence fierce competition. However,
Pfizer and BioNTech SE will probably reign this market in
the next few years. Consequently, shares of these companies might as well make a profit to those who invested in them.
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