As more earnings results trickle in, biotech investors saw a surge of volatility across Covid-19 stocks. The biggest catalyst was disappointing news that a long-planned Covid pill from a pharmaceutical giant flopped in a critical trial. Pfizer (NYSE: PFE) reported that its Covid-19 antiviral pill that’s been in development for years failed to meet a primary endpoint for preventing infections. In response, Pfizer’s main competitors were up noticeably on the news, most notably Moderna (NASDAQ: MRNA) and Novavax (NASDAQ: NVAX).
Pfizer’s Covid-19 pill, Paxlovid, reported a surprise clinical flop during its most recent phase 2/3 study. The company said that the drug candidate did not meet the goal of the trial, which was to prevent new infections. Around 3,000 patients were gathered, largely during the height of the Omicron wave, for the purpose of this clinical test.
While Paxlovid ended up showing some results, including a 32% and 37% risk reduction for those taking the antiviral over five and ten days, respectively, these results weren’t enough to be statistically significant. However, they were still noticeable in and of themselves, and some doctors still recommend the drug to patients at high risk of side effects or death.
“The trial miss at most takes away a small incremental sales opportunity in future years,” said Bloomberg Intelligence analysts John Murphy and Sam Fazeli in a note on Monday. “The reports of rebound infections are “also not surprising as viral dynamics during an infection are unlikely to fit perfectly with a rigid 5-day course.”
While the results aren’t great, it isn’t expected to kill the drug candidate entirely. Morgan Stanley estimates had predicted Pfizer’s drug sales could reach $48 billion in 2022. Currently, Paxlovid is indicated for at-home use by patients that are designated as being at high-risk of catching Covid. Doctors still recommend the drug, although that might change a bit now that this new batch of data is out.
Shares of Pfizer were down around 1.5% following the news. In contrast, other vaccine and treatment makers, especially Moderna and Novavax, were up significantly on the news that this potential competitor might flop after all. Shares of Moderna were up over 8%, while Novavax surged 13%.
Moderna also announced that its Covid-19 vaccine for children under six years old would be ready for review by U.S. authorities sometime this summer. The company already applied for emergency use authorization last week.
Both stocks have struggled over the past year. Although most analysts covering the two companies remain bullish, the same feverish excitement surrounding Covid stocks has all but abated. Traders still drive a lot of volume to these companies on days when Covid news is trending, as it is right now in China.
Moderna Company Profile
Moderna is a commercial-stage biotech that was founded in 2010 and had its initial public offering in December 2018. The firm’s mRNA technology was rapidly validated with its COVID-19 vaccine, which was authorized in the United States in December 2020. Moderna had 24 mRNA development programs as of early 2021, with 13 of these in clinical trials. Programs span a wide range of therapeutic areas, including infectious disease, oncology, cardiovascular disease, and rare genetic diseases. – Warrior Trading News
