- Major milestone: US pharmaceutical Pfizer (NYSE:PFE, PFE:US) and German biotech BioNTech (Nasdaq: BNTX, BNTX:US) claimed their vaccine candidate for SARS-CoV-2 is 90 per cent effective in preventing COVID.
- Global stock markets soared, riding on the news of successful COVID vaccine trials.
- Pfizer stocks shot up by over 7 per cent, while BioNTech gained 13 per cent.
The S&P/TSX Composite, the key Canadian benchmark index, rose by 193.03 points after US pharmaceutical Pfizer (NYSE:PFE, PFE:US) and German biotech company BioNTech (Nasdaq: BNTX, BNTX:US) announced encouraging results from first interim analysis of global phase 3 study for vaccine against coronavirus on Monday. In a joint official statement, the companies claimed the vaccine candidate for SARS-CoV-2, the virus that causes COVID-19, is 90 per cent more effective in preventing virus in participants without evidence of the infection.
This means, out of 10 people who receive the vaccine, only one will get sick.
Pfizer and BioNTech SE are the first entities to release promising data from a large-scale clinical trial of a coronavirus vaccine.
Calling the development ‘a critical milestone’, Pfizer Chairman and CEO Dr Albert Bourla said that the experimental vaccine “may effectively prevent COVID-19.”
As per details shared by Pfizer, protection against the virus is achieved 28 days after administration of two-dose vaccine.
The Phase 3 clinical trial, which began on July 27, has 43,538 participants to date. Of this, 38,955 of candidates received a second dose of the vaccine by November 8, 2020. The study evaluated 94 confirmed coronavirus cases among participants. Clinical trial is currently underway for another 164 confirmed cases.
Coronavirus pandemic has claimed over 1.26 million lives worldwide till date.
Pfizer Inc. (PFE:US)
Pfizer stocks shot up by over 13 percent at open on Monday, November 10, following the announcement of breakthrough in phase 3 clinical trials. The stocks touched a 52-week-high during intraday trade, hitting US$41.99 at one point during the day. The stocks were trading at US$39.2 at closing, up ~7.7 per cent.
As per projections, Pfizer will globally produce up to 50 million vaccination doses in 2020 and up to 1.3 billion doses in 2021.
The C$ 217-billion pharmaceutical announced US$0.38 quarterly dividend per share, yielding 3.878 per cent currently. The firm’s three-year dividend growth stands at ~12 per cent.
As per data on the TMX portal, Pfizer stock currently holds a price-to-equity ratio of 23.3, price-to-cash flow ratio of 16.3. The return on equity and return on assets stands at 13.33 per cent and 4.97 per cent respectively.
Pfizer stocks’ 10-day average volume stands at 46.3 million.
The pharma giant recently announced US$60 million equity investment in genetic medicines firm Homology Medicines, Inc. (Nasdaq: FIXX).
YTD Chart of Pfizer Stock (Source: Refinitiv, Thomson Reuters)
Vaccine Developers’ Stock
BioNTech's (NASDAQ: BNTX, BNTX: US) stock hit its 52-week-high of US$ 115 on Monday, before closing at US$ 104.8, nearly 13 per cent higher. The biotech company’s current market capitalization is C$ 24 billion. The stock holds a P/B ratio of 35.05.
Stock value of other vaccine developers also rose.
Johnson & Johnson, whose COVID-19 vaccine is in final stages of testing, gained ~2.67 per cent, while Moderna stocks rose by 7.3 per cent.
Stock Market Cues
After spending weeks obsessing about the 2020 US elections and its outcomes, investors are back focusing on the pandemic-related developments. Buoyed by the news of successful COVID vaccine trials, worldwide stocks surged on Monday.
On Wall Street, the S&P 500 jumped up by 1.17 per cent, while the NYSE and the Dow Jones 30 Futures bagged 2.9 per cent and 0.40 per cent, respectively.
Back home, the TSX Composite gained 1.18 per cent. Baring informational technology, all other indices rose. Energy index posted the highest gains of 16.73 per cent, followed by health care, which was up 6.7 per cent.
The news of possible COVID vaccination also led to a fall in prices of precious metals and stay-at-home stocks.
Gold futures slumped over five per cent on Monday to US$ 1,854.40 as investors indulged in massive sell off of the safe asset and piled up on riskier and cyclical assets including energy stocks. Silver futures doffed 9.03 per cent to US$ 23.701.
Zoom Video Communications slid, the communications platform that eased the work-from-home transition, nosedived by over 17 per cent on Monday. TSX tech stocks such as Shopify Inc (TSX: SHOP), which rallied during the coronavirus-led market crash, lost nearly 14 per cent. Several other tech and e-commerce stocks, which made life easier during the pandemic, slumped.
Pfizer’s latest news is encouraging for investors. But there could several stumbling blocks and delays along the way, opined market analysts. The mass level distribution of such the vaccine is being viewed as a challenge by many.
Hours after Pfizer and BioNTech claimed 90 per cent success in COVID-19 vaccine trials, Russia asserted that its Sputnik V vaccine against the virus is over 90 per cent effective. The claim was made by a Russian health ministry representative.
Meanwhile, current US President Donald Trump, alleged that the Food and Drug Administration (FDA) and Pfizer withheld the announcement by five days to prevent his "vaccine win".
Trump has challenged the election results and Democrat Joe Biden’s win in court.
New President-elect Joe Biden said the announcement promises the chance to change that next year, but the tasks before them now remain the same.