Daily Management Review

Shares Of Covid-19 Vaccine Makers Hit By Success Of Merck’s Covid-19 Pill


Shares Of Covid-19 Vaccine Makers Hit By Success Of Merck’s Covid-19 Pill
The global healthcare sector was shaken up by the successful results of clinical trial results for Merck & Co's experimental antiviral Covid19 medicine which pushed the share price of the company while bringing down the stock prices of drug makers making vaccines as well as producers of other therapies of coronavirus. ,
After research showed that the company's tablet molnupiravir might cut the odds of dying or being hospitalized among people who are most at risk of acquiring severe Covid-19, there was a rise of as much as 12.3 per cent in the stocks of Merck to reach its highest level since February 2020. Experts welcomed the finding as possibly a significant breakthrough in the fight against Covid-19.
On the other hand, there was a drop in the stock prices of vaccine makers like Moderna Inc, Pfizer Inc, and partner BioNTech SE. A section of analysts claimed that the prospect of an oral medication that will be possible to take at home could
At the same time, shares of vaccine producers such as Moderna Inc, Pfizer Inc, and partner BioNTech SE fell, with some analysts claiming that the prospect of an oral medication that can be taken at home might influence public perception of Covid-19 dangers.
"We see modest perceived headwind to vaccine stocks such as MRNA (Moderna) if the market thinks people will be less afraid of Covid-19 and less inclined to get vaccines if there is a simple pill that can treat Covid-19," Jefferies analyst Michael Yee said in a client note.
The share price of Moderna plummeted by 13 per cent in noon trade, while there was a fall of 1.3 per cent in the stocks of Pfizer, which is developing its own Covid-19 tablet. There was also an 11 per cent drop in the stocks of BioNTech's stock in the United States.
The Merck announcement offered an opportunity for Moderna investors to secure their gains following what has already been a spectacular surge. Despite Friday's losses, Moderna shares, which were added to the S&P 500 in mid-July, are still up 220 per cent in 2021. Even after Friday's drop, BioNTech's shares were up almost by 200 per cent for the year.
Merck's announcement is significant "“Great cause for people to be taking gains off the table” in Moderna and BioNTech shares, according to Wedbush Securities' Sahak Manuelian, head of equities trading. "These moves can get exacerbated to the downside given the momentum they have had to the upside."
Other firms with Covid-19 vaccines saw their shares decrease as well, with AstraZeneca down 2 per cent and Novavax down 16 per cent.
Companies with additional Cvodi-19 intravenous or injectable treatments traded down as well, with Regeneron Pharmaceuticals In down almost 5per cent and Gilead Sciences Inc down around 2 per cent.
The only one of the 11 S&P 500 sectors to be in the red territory was Healthcare whose shares declined by 0.5 per cent in mid-day trading.
"We see molnupiravir, with its oral format as a clear game-changer that is likely to meaningfully impact not just the treatment paradigm for Covid-19 but also has potential utility in the prevention setting," Piper Sandler analyst Christopher Raymond said in a research note.
Currently, Merck has undertaken a late-stage trial to determine if its antiviral tablet may prevent Covid-19 infection, in addition to a research that has shown it can reduce hospitalization and death in people who are already infected.
Merck, whose stock is now up around 9 per cent this year, is leading the race to produce the first oral antiviral treatment for Covid-19. Pfizer and Swiss pharmaceutical Roche Holding AG, along with partner Atea Pharmaceuticals Inc, are conducting late-stage studies for their tablets. Shares of Atea were up 19 per cent.
Merck, which halted its own Covid-19 vaccine development, had seen its shares tumble roughly 4 per cent this year to date until turning positive on Thursday and then moved onto positive territory for the year on Friday.
"Merck has kind of been dead in the water to investors for the past couple of quarters," said Kevin Gade, portfolio manager with Bahl & Gaynor, which owns Merck shares. "This shows their R&D engine is not dead and they were first ... in what could be a multi-billion dollar opportunity."