Moderna stock plummeted on Biden’s support of waiving vaccine patent protections, but that backing won’t have a material impact on the company, Morgan Stanley says

Moderna covid vaccine coronavirus
Moderna’s COVID-19 vaccine won emergency use authorization from the FDA in December 2020.

  • Moderna shares have dropped sharply since the Biden administration on Wednesday voiced support for waiving patent protections on COVID-19 vaccines.
  • Morgan Stanley said it doesn’t see the US’s waiver support as having a material impact on Moderna’s business.
  • Moderna’s management had indicated it wouldn’t enforce its vaccine patent during the pandemic, says Morgan Stanley.
  • See more stories on Insider’s business page.

Moderna shares fell sharply for a second session Thursday after the US said on Wednesday it supports waiving intellectual property protections for COVID-19 vaccines. The stock has now declined as much as 23% since Monday’s close after a 7% drop on Tuesday.

But Morgan Stanley said it doesn’t see a waiver materially hurting the biotech company’s business.

The Biden administration supports a waiver “in service of ending this pandemic,” even as it “believes strongly in intellectual property protections,” US Trade Representative Katherine Tai said in a statement Wednesday.

A waiver would allow other countries to make vaccines from Johnson & Johnson, Pfizer, and Moderna without fearing sanctions at the World Trade Organization.

While the US’s waiver support generates “a negative headline, we believe the practical impact is limited,” on Moderna’s business, said Matthew Harrison, an equity analyst at Morgan Stanley, in a note published Thursday.

He said Moderna’s management had previously indicated it wouldn’t enforce its intellectual property patent during the pandemic. Meanwhile, the investment bank said it doesn’t believe the WTO has any mechanism to force Moderna’s management to teach other manufacturers how to make its vaccine, which suggests no change in the status quo.

“Finally, we believe any new manufacturing operation could take 6-9 months to scale, effectively limiting the impact of other manufacturers,” wrote Harrison.

Shares of Pfizer were off by nearly 3% on Thursday and BioNTech was down by more than 2%.

“You have this political pressure to share patents with every pharmaceutical company. Then you have the other side of it, which is these pharmaceutical companies need to be motivated to always do research and development. Even though there was a pandemic and a humanitarian crisis, there is still a cost,” Hilary Kramer, chief investment officer at Kramer Capital Research, told Insider.

“Whether it’s Pfizer or Moderna or BioNTech, they have a responsibility to their shareholders and they also have a responsibility to continue to have a pipeline of products and to know [that R&D] is going to pay off,” she said. “We need to watch that – that could have a greater impact on pharmaceutical stocks.”

Read the original article on Business Insider

BioNTech soars 7% after its vaccine appears to work against new variants of COVID-19

pfizer vaccine
  • BioNTech soared as much as 7% on Friday following reports that its COVID-19 vaccine is effective against a variant strain recently found in the UK.
  • According to a lab study conducted by Pfizer, the vaccine was effective in neutralizing the virus with the N501Y mutation of the spike protein.
  • New variants of the COVID-19 strain found in the UK and South Africa are thought to be more contagious than the original strain.
  • Visit Business Insider’s homepage for more stories.

BioNTech jumped as much as 7% on Friday after a study was published showing that its COVID-19 vaccine is effective against a mutated strain of COVID-19 that has been found in the UK in recent weeks.

The new strain is thought to be more contagious than the original COVID-19 strain and has recently popped up in other countries in Europe and the United States.

According to a lab study conducted by Pfizer and scientists at the University of Texas Medical Branch, the vaccine succeeded in neutralizing the virus with the N501Y mutation of the spike protein.

The lab study has not yet been peer reviewed and more studies will be required to ensure that the vaccine is effective against other strains of the virus.

Read more: Wall Street experts are calling Georgia’s runoff results ‘the first surprise of 2021.’ Here’s how 4 of them recommend positioning your portfolio for what could happen next.

The study utilized blood taken from people who had already been given the vaccine, and the findings are limited because it does not look at the full set of mutations found in new variants of the virus. 

But the findings are still “good news” according to Phil Dormitzer, a vaccine scientist at Pfizer.

“So we’ve now tested 16 different mutations, and none of them have really had any significant impact. That’s the good news,” Dormitzer told Reuters. 

Read the original article on Business Insider