Stock gains more muted as investors welcome the news of another potential treatment
Thursday 19 Nov 2020 Author: Ian Conway

The revelation from US pharmaceutical company Moderna that its vaccine was 94.5% effective in treating coronavirus, with no significant safety concerns, sent global stock markets up between 1% and 2% on 16 November.

This compares with a bump of around 5% in response to the positive update from Pfizer and BioNTech a week earlier and suggests there may be diminishing returns from further vaccine news – with the table showing some of the main other candidates, several of which are centred in China.

The most meaningful will probably come from Astrazeneca (AZN) which is due to report on its vaccine, being developed together with the University of Oxford, in the next month.

According to Adam Barker, analyst at Shore Capital, AstraZeneca’s treatment ‘doesn’t have to hit a 90%+ efficacy bar to still be useful, and it remains the most stable of all the candidates at refrigerated temperatures’.

The market winners and losers were much the same on the Moderna news as the earlier vaccine catalyst, with hotels and airlines racking up large gains and previous lockdown ‘winners’ including online retailers suffering losses, albeit the moves were not as spectacular.

Moderna claimed preliminary analysis of its late-stage trials involving more than 30,000 volunteers showed the vaccine prevented the most serious cases of infection, with no severe cases at all among those who received it. ‘That for me is a game-changer’, said Moderna chief executive Stephane Bancel. Moderna shares initially soared 12% on the news.

Like the Pfizer/BioNTech vaccine, which claims to be more than 90% effective, the Moderna treatment uses mRNA technology designed to turn the body’s own cells into vaccine ‘factories’, creating copies of the virus’s ‘spike protein’ which in turn stimulates the production of antibodies. Both firms have struck significant supply deals with the US government.

While the results are preliminary and the technology has yet to be approved, both firms are expected to ask the US Food and Drug Administration for emergency-use authorisation dependant on follow-up safety data later this month.

Crucially, while the Pfizer/BioNTech vaccine has to be stored at ultra-low temperatures of -60 to -80 degrees Celsius until a few days before use, the Moderna vaccine is stable at normal refrigerator temperatures of -2 to -8 Celsius and can be kept for up to 30 days or can be frozen if needed. This gives it a significant advantage in terms of ease of distribution.

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