Why BioNTech, Moderna, and Novavax Stocks Are Sinking Today

What happened

Shares of several top COVID-19 vaccine makers were sinking as of 10:22 a.m. ET on Tuesday. BioNTech (NASDAQ: BNTX) was being hit the hardest, with the stock down 9.8%. Shares of Moderna (NASDAQ: MRNA) and Novavax (NASDAQ: NVAX) had fallen 7.4% and 8.2%, respectively.

It's easy to determine why BioNTech stock is dropping. Results from a clinical trial conducted in Israel found that a fourth dose of the COVID vaccine developed by BioNTech and its big partner, Pfizer (NYSE: PFE), didn't prevent infection by the coronavirus omicron variant.

Israel had begun giving a fourth dose of the Pfizer-BioNTech vaccine to older and immunocompromised individuals. But Gili Regev-Yochay, the lead researcher for the clinical trial conducted in the country, stated that the latest results don't appear to support offering a fourth dose of the vaccine to the entire population. This could hurt BioNTech's and Pfizer's prospects of selling more doses of their COVID vaccine in Israel and perhaps in other countries.

A healthcare professional giving a shot to a person with another healthcare professional watching.

Image source: Getty Images.

Why would Moderna's shares also fall? The company's COVID vaccine, like the Pfizer-BioNTech vaccine, uses a messenger RNA (mRNA) approach. It's quite possible that similar results will be found with a fourth dose of Moderna's vaccine.

Novavax, on the other hand, developed a protein sub-unit vaccine. It delivers viral proteins, boosted by an adjuvant, directly into cells instead of relying on mRNA to provide instructions on producing proteins identical to those found on the surface of the coronavirus that causes COVID.

However, Novavax investors could be reacting negatively to comments made by Moderna CEO Stéphane Bancel in a panel discussion at the World Economic Forum on Monday. Bancel said that Moderna could have a combination vaccine for COVID, flu, and respiratory syncytial virus (RSV) available before the winter of 2023. Novavax is developing its own combo COVID/flu vaccine.

So what

Could the sell-off of vaccine stocks be overdone? Probably.

It might not seem like great news for BioNTech and Moderna if a fourth dose of their COVID vaccines doesn't prevent infection by the omicron variant. However, the results from the study conducted in Israel showed that participants who received a fourth dose of the Pfizer-BioNTech vaccine experienced mild or no symptoms.

More importantly, BioNTech (with Pfizer) and Moderna are also developing omicron-specific versions of their vaccines. The results from the latest Israeli study could simply mean that these new vaccines will have greater opportunities.

As for Novavax, the company could still have an advantage over Moderna with the development of a combo COVID/flu vaccine. Novavax has already reported positive results for its flu vaccine NanoFlu while initial results for Moderna's mRNA flu vaccine were underwhelming.

Also, Bancel's comments at the World Economic Forum reflected, in his words, a "best-case scenario." Moderna's top executive in the United Kingdom, Darius Hughes, has previously stated that it would be a "stretch" for the COVID/flu combo vaccine to be ready by the winter of 2023.

Now what

BioNTech and Pfizer expect to have their omicron-specific vaccine ready by March 2022. Moderna hopes to share data with regulators from its testing of an vaccine targeting omicron around the same time.

Novavax awaits regulatory decisions for its COVID vaccine in several countries. It also anticipates filing for U.S. Emergency Use Authorization within the next few weeks.

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Keith Speights owns Pfizer. The Motley Fool recommends Moderna Inc. The Motley Fool has a disclosure policy.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


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