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Vaccine Rivals Clash

Moderna declines on concerns about takeup of Covid booster

The recent developments involving $Moderna, Inc.(MRNA)$, $Pfizer(PFE)$, and $BioNTech SE(BNTX)$ have brought forth intriguing dynamics within the biotech and pharmaceutical sectors. The primary focus is on the concerns surrounding the uptake of Covid boosters in the United States, which has had a palpable impact on the stock performance of these companies.

David Denton

Pfizer's Chief Financial Officer, David Denton, outlined Pfizer's cautious outlook during his presentation at the J.P. Morgan 14th Annual U.S. All Stars Conference. He expressed Pfizer's expectation that only approximately 24% of the U.S. population recommended to receive the newly approved Covid booster would actually choose to do so. This revelation, comparing it to the flu vaccination rate of around 50%, raised eyebrows.

The immediate consequence of Denton's statements was a noticeable slump in Moderna's stock price, plunging by 8.7% and making it the worst-performing stock in the S&P 500 index. Pfizer shares, while not as severely affected, saw a 1.3% decline in their value. BioNTech SE, Pfizer's partner in vaccine development, also experienced a 3.6% drop.

Now, let's delve into the potential implications and my personal take on this development.

Potential Implications

Firstly, it's evident that there is uncertainty in the air, particularly regarding the demand for Covid booster shots. Denton's 24% vaccination rate projection for the newly approved booster suggests that not everyone is enthusiastic about receiving additional doses. This hesitancy may be driven by various factors, including concerns about side effects, the evolving nature of the pandemic, and changing public attitudes towards vaccination.

The immediate impact on Moderna's stock price is a reflection of market sentiment. Investors often react swiftly to news, and in this case, the projection of lower booster uptake has raised concerns about Moderna's revenue potential. After all, booster shots represent a significant revenue stream for vaccine manufacturers.

However, it's crucial to note that this situation is far from static. Denton himself mentioned that better clarity on vaccine rates is expected in the coming year. This implies that the vaccination trends could shift. It's also possible that public health measures, regulatory changes, or other factors may influence vaccination rates.

My Personal Take

From an investor's perspective, it's essential to approach these developments with a balanced view. While short-term market reactions can be sharp and emotionally charged, it's equally important to consider the broader context. The efficacy and relevance of Covid vaccines, booster strategies, and global health policies continue to evolve.

For Moderna, Pfizer, and BioNTech SE, these near-term fluctuations may be part of a more extended journey. Their stock performance should be evaluated within the context of their overall business strategies, pipelines, and the global response to the ongoing pandemic.

MRNA Weekly Chart

Moderna is currently encountering a formidable resistance zone spanning from 115.03 to 118.92. As it traverses these challenging waters, there's a potential scenario where it tests the lows seen in August, finding support within the range of 86.14 to 95.21.

PFE Weekly Chart

In my previous post Why am I Catching the Falling Knives of Pfizer?, I mentioned that I am accumulating Pfizer’s shares, and my plan is to increase my allocation when the price falls lower to the 27-31 range. This has not changed and I will be adding more shares if it happens.

If you have the fortitude to weather unrealized losses, you're positioned for the eventual realization of substantial gains.

“If you've got the guts to stomach those unrealized losses, you're in for a wild ride of ultimate gains” -TigerOptions, September 2023

BNTX Weekly Chart

BioNTech SE currently resides within a critical range. Further observation is required to discern its prevailing trend.

Conclusion

In conclusion, the recent news may have injected some uncertainty into the biotech and pharmaceutical sectors, impacting Moderna, Pfizer, and BioNTech SE. However, investors should exercise patience and maintain a long-term perspective. The course of the pandemic and the response to it are still unfolding, and it's too early to draw definitive conclusions about the future of these companies. While short-term challenges persist, the biotech industry's capacity for innovation and adaptation remains a driving force to watch closely.

Disclaimer: This post is for educational and informational purposes only. It does not constitute financial advice or a recommendation to buy, sell, or hold any securities. Investment decisions should be made based on individual research. [Observation]  

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