Daily Management Review

As Governments Mull Patent Waiver Stocks Of Covid-19 Vaccine Maker Shares Sink


As Governments Mull Patent Waiver Stocks Of Covid-19 Vaccine Maker Shares Sink
With governments considering plans for waiving off of patent protection for Covid-19 vaccines, there was a fall in the shares of vaccine makers. Analysts however said that   investor sentiment could be rattled or impact long term business prospects.
There were some analysts who raised doubts over the possible pressure on Covid-19 vaccine sales in the short term because of the discussions of waiving intellectual property rights because of the complexity in manufacturing vaccines and the shortage of raw materials.
Combined total sale revenue of more than $45 billion of the Covid-19 vaccines for this year was forecast earlier by Pfizer Inc and Moderna Inc.
There was a 1.7 per cent drop in the stocks of Pfizer while there was a 0.6 per cent drop in the stocks in the United States of its German partner BioNTech SE. There was a 1.3 per cent drop in the stocks of Moderna while there was little change in the stock prices of Johnson & Johnson and AstraZeneca Plc.
"This measure is a potential risk to the long-term tail for the vaccine players – though we remind investors that the Street and share prices were already skeptical on the longer-term sustainability of these businesses," Barclays analysts said in a note.
The stocks of these companies got the first hit on Wednesday following the backing of the United States president Joe Biden of a proposed waiver of patent rights of Covid-19 vaccines from multiple quarters and countries.
Patent activists and the World Health Organization had welcomed the move by the Biden administration as they believed that this move could increase access to Covid-19 vaccines for poorer countries including India which is currently the latest epicentre of the pandemic. The massive spread of infections in the country has overwhelmed hospitals amid shortages of oxygen and medicines.
There was however some recovery in the stocks after a statement by a German government spokeswoman who said that there will be significant implications for production because of the patent waiver proposal of the US. According to experts and analysts, it could be months before the World Trade Organization (WTO) could iron out a deal on the issue despite Biden's backing.
The stocks of those US companies that are still in the process of developing Covid-19 vaccines wer4e also shattered. There was a fall of almost 10 per cent initially in the stocks of Novavax Inc whose vaccine has not yet been approved for usage by any country even though the company is preparing for delivery of the vaccine sometime later this year. The stocks later picked up by about 1.,6 per cent.
There was also falls in the stocks of Covid-19 vaccine makers in other parts of the world. There was a 18 per cent drop in the share prices of Germany's Curevac NV – whose vaccine is pending approval. There was a 15 per cent fall in the stocks of China's CanSino Biologics Inc, which makes a single-dose Covid-19 vaccine.