Covid-19 vaccine development gives shot in the arm to share prices

It might be an unintended or unforeseen side effect of the development of the Covid-19 vaccine, but there has been a definite correlation between the share prices of pharma majors and news of the vaccine hitting the market.

Many investors jumped on the optimism bandwagon as they want to be a part of any future successes. The rally began in Asia-Pacific markets, where Japan’s Nikkei jumped to its highest level in 29 years, with the “Biden Bounce” was also cause for optimism on the back of the President-Elect’s win. London gained 6.9%, Wall Street put on 6.5%, while the Europe-wide Stoxx 600 index rose by 5.3% in just five trading days as investors raised their hopes that global trade would soon return to a form of normality.

Pfizer and BioNTech’s candidates totted 95% efficacy against COVID-19 in a completed Phase 3 study, while Moderna announced a similar efficacy rate for its vaccine candidate based on preliminary Phase 3 trials results. Meanwhile, Oxford University and AstraZeneca announced that their candidate produces a strong immune response in elderly and older adults.

However, as the below chart shows, it hasn’t been a shot in the arm for all companies. Moderna and BioNTech’s fortuned soared high through much of 2020, while relative pharma Goliaths Pfizer and AstraZeneca gained ground at a steadier pace, with Pfizer’s share price even down 2 percent since the beginning of the year.

 

However, there is much cause for optimism. The vaccine performed far better than many experts had anticipated it to, and with it brings hope for an end to the pandemic that has not just killed more than a million people globally, but also ravaged economies and put the brakes on our daily lives as we know it.

The results as we see them are merely interim results; trials will continue into December and beyond, but there is bated optimism that these vaccines will move the needle forward for global society and industry.

However, not everyone had cause for celebration. Video conferencing app Zoom saw its share price plummet in the wake of Pfizer’s announcement about its coronavirus vaccine candidate, with Peloton, Netflix, and other stocks whose health is linked to the ‘stay-at-home’ economy suffering likewise. 2020 has just been that crazy, topsy-turvy a year, and we can’t wait to get off this wild ride.

Disclaimer: The views expressed in this article are those of the author and do not necessarily reflect the views of ET Edge Insights, its management, or its members

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