Vaccine Stocks: Why MRNA, BNTX, NVAX, PFE Stocks Are Stumbling Today

Good news for public health can sometimes mean bad news for vaccine stocks. Today reminded us exactly why. After more than a week of ominous reports on the omicron virus and mounting speculation about its severity, yesterday brought some welcome news. Dr. Anthony Fauci, White House chief medical officer and a trusted expert on the virus, stated yesterday that some clear preliminary data was finally starting to emerge on the severity of the new variant and that so far, the results looked “encouraging.”

A bunch of glass vials of SARS-CoV-2 vaccines.
Source: Shutterstock

What’s Happening With Vaccine Stocks

Since news of the new variant first began dominating media airwaves, vaccine producers have been scrambling to be the first to address the new Covid-19 strain that threatened to undo the work that sent their stocks up earlier this year. Today has seen all the prominent names among vaccine stocks plunge across the board. While this isn’t strictly due to Dr. Fauci’s comments, it’s possible that the demand for new vaccine innovations and treatments may not be as great as we feared only a few days ago.

BioNTech (NASDAQ:BNTX) has suffered the worst declines of the day among vaccine stocks, with shares down almost 19% as of this writing. Next in line is Moderna (NASDAQ:MRNA), which has fallen more than 13%. Then, Novavax’s (NASDAQ:NVAX) declines come in just shy of 12%. Rounding out the pack is Pfizer (NYSE:PFE), which is in the red by just over 5% as trading winds to a close today.

Why It Matters

The clearest indication we should take from today’s events is that market mentality is shifting. This is evidenced by the performances we’ve seen not just from vaccine stocks but from other sectors that were differently effected by the spreading variant news. As InvestorPlace’s Shrey Dua reports, cruise ship stocks such as Royal Caribbean (NYSE:RCL) and Carnival (NYSE:CCL) are back in the green today after a troubling week of variant concerns. The same can be said for airline stocks, as names such as Delta (NYSE:DAL) and Southwest (NYSE:LUV) have gained some altitude today.

Of course, it’s too soon to tell what the future will look like. The preliminary results upon which Dr. Fauci commented are exactly that — preliminary. Scientists and medical researchers still have plenty of research to do before they will be able outline a bigger picture. Dr. Fauci was careful to add that while there does not seem to be a “great degree of severity” to the spreading variant, it is still too early for any definitive conclusions to be reached. Omicron is still very much a variant of concern.

What It Means

Even if the variant does not end up posing as serious a threat to highly vaccinated countries as has been speculated, the need for vaccines isn’t going to go away. Fear of the variant has spiked a demand for vaccinations in the U.S., and many countries are still struggling to get more of their populations partially or fully vaccinated. The industry landscape may not end up looking quite as bleak close to home as some of us have feared. However, that doesn’t mean that the demand for vaccines won’t be increasing throughout the months ahead.

This news certainly doesn’t mean that a bearish play on vaccine stocks is advisable. Far from it, in fact. Novavax has an important catalyst rapidly approaching as the World Health Organization (WHO) considers granting it emergency use authorization. More than likely, vaccine stocks will be quick to rebound.

On the date of publication, Samuel O’Brient did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the Publishing Guidelines.

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