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10 November 2020
One of the reasons investors can be optimistic about 2021 is the speed with which the first of the Covid-19 vaccines delivered Phase 3 data. On Monday 9 November the American pharmaceutical major Pfizer (NYSE: PFE) announced the results of an interim analysis showing that the BNT162b2 vaccine was more than 90% effective in preventing COVID-19 where patients hadn’t been infected before.
BNT162b2 is what’s called a ‘mRNA vaccine’. Messenger RNA is the nucleic acid ‘photocopier’ that copies each individual strand of DNA so that the DNA can be turned into proteins. BNT162b2, which was developed by a German biotech company called BioNTech (Nasdaq: BNTX) uses messenger RNA that describes one of the spike proteins that stud the outer surface of COVID-19. When the test subjects received the vaccine, their cells were able to produce the spike protein, but only the spike protein. Their own immune systems can then generate an immune response against the spike protein, and, by extension, the virus. The result, it would seem, is widespread protective immunity.
Pfizer and BioNTech recruited in excess of 40,000 people into this study after it opened in late July, so the data are fairly robust. The vaccine has had no safety issues, and while the study is still ongoing, the developers intend to file with the FDA for approval before the month of November is out.
Conclusions for investors
Pfizer and BioNTech’s triumph will, in our opinion, be good for investors globally for several reasons. Firstly, it flags that the Coronavirus Crisis will indeed come to an end.
Secondly, for investors who look at the Life Sciences sector, the result is likely to increase confidence that the sector can deliver the goods in a crisis and create shareholder value in the process.
Thirdly, a lot of the beaten down sector, like Hospitality, Tourism, Airlines, Energy etc., can finally hope to see the start of a recovery, while many of the COVID “beneficiaries”, like online retailers, Buy Now, Pay Later stocks and Technology companies that benefitted from the WFH (Work From Home) trend may have to take a back seat when it comes to share price performance in the next little while.
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