With the Covid-19 pandemic the dominant issue for most of the world for almost two years, companies competing to develop vaccines and other treatment have seen efforts rewarded in their share prices.
Michal Marszal, senior analyst and portfolio manager at CIBC Asset Management, noted that the majority of vaccine development to date has been focused on the mRNA-based vaccines. Cambridge, Mass.-based Moderna Inc. and New York-based Pfizer Inc. (which developed its vaccine with German firm BioNTech SE) have been among the big winners.
These two mRNA vaccines account for the vast majority of vaccinations in the Western world, said Marszal, and for that reason “have tremendously benefited the companies that have developed them.”
Moderna’s stock has moved from below US$30 (all figures in U.S. dollars) at the pandemic’s onset in March 2020 to a peak of almost $450 last fall. This week it’s trading around $220.
Pfizer’s stock was trading around $33 in early March 2020 and has risen to above $55 this week.
Other players have stumbled, Marszal said, including German mRNA developer CureVac and Maryland-based Novavax, which was developing a more traditional vaccine.
“Despite a very positive clinical development program, [Novavax] has faced a number of setbacks with respect to manufacturing, and therefore has so far not played any role whatsoever in global vaccinations,” he said.
The outlook for the company remains uncertain as the mRNA technology may be more adaptable for emerging variants of the virus, Marszal said. The existing vaccines have also already established long-term contracts for tenders in most markets.
Marszal also noted another more traditional vaccine development program from Paris-based Sanofi and U.K.-based GlaxoSmithKline. However, the program has been “relatively slow in advancing through clinical development,” he said, and really only focuses on potential alternatives to mRNA boosters.
The more interesting developments may be on therapeutic treatments for Covid-19.
“Here, interestingly enough, Pfizer yet again has come out on top with their protease inhibitor, which is an oral pill that can be used for treating Covid-19 infections once diagnosed,” he said.
Another therapeutic treatment in development from Aprea Therapeutics and Roche Pharma was terminated after failure in late-stage clinical trials, Marszal said, while a product from New Jersey-based Merck “showed more modest clinical efficacy.”
As a result, Marszal said he thinks Pfizer is likely to remain dominant in the space.
This article is part of the AdvisorToGo program, powered by CIBC. It was written without input from the sponsor.