2021 the year of pharma: A look at Moderna and Pfizer stocks

An overview of Moderna and Pfizer stocks

2020 was all about COVID-19, the brand-new pandemic which took the world by storm, sweeping through continents and debilitating countries. 21st-century medicine came to the rescue, developing vaccines to fight the virus. Fast forward to 2021, the hot topic is the COVID-19 vaccine, or rather vaccines.

The infamous vaccine is not just ‘one’ vaccine, a number of pharmaceutical companies have developed different vaccines which are being rolled out in different countries. In fact, vaccines are a gigantic business at the moment highly affecting the status of the companies producing and selling them. Pfizer and Moderna became household names, celebrities one might say as anxious consumers hoped to see light at the end of the COVID-tunnel.

Where there’s business there’s money, and where there’s money there are opportunists. Investors spent their first lockdown studying every possible scenario for companies such as Pfizer and Moderna, foreseeing a major spike in their stocks, provided they indeed become saviors of the world.

Let’s take a look at how these companies have performed in light of releasing the vaccines and how their stocks have been affected.

Moderna: COVID-19 (mRNA-1273) vaccine

Stock price (at the time of writing): 147.47 USD per share
Stock price before vaccine release: Under 35 USD per share

Up until late 2019, Moderna’s price was under 25 USD per share. When the company announced that its COVID-19 vaccine was 94.1% effective in phase 3 tests in December 2020, the stocks shot up. On February 8 2021 Moderna shares hit a record high.

In 2020 Moderna shares shot up by more than 434%, despite announcing losses for the company. Now with the vaccine in active use, a bullish outcome is expected.

The plans at the moment are for 1.4 billion doses to be made in 2021.

Moderna’s been a winner for shareholders. Its stock has skyrocketed more than 570% over the past 12 months. The company’s CEO Stéphane Bancel assures investors that revenue from the vaccine will fund more research and development. Another positive analysts point to is Moderna’s pipeline of recurring revenue streams. The COVID-19 vaccine, booster shots, and other successor vaccines will continue to produce more growth for the biotech company.

Pfizer, Inc. and BioNTech (BNT162b2) vaccine

Stock price (at the time of writing): 36.40 USD per share
Stock price before vaccine release: 40.74USD per share

It’s been a very different story for Pfizer stock which underperformed during the pandemic relative to other covid stocks.  PFE was trading below 35 USD in mid-November and as it entered into December was just pennies shy of 40 USD. By December 9th, it had peaked at 43.09 USD.

In early December Pfizer announced it would scale back its manufacturing capacity from 100 million to 50 million doses.  That wasn’t good news for wall street, and stocks in Pfizer began a downside move shortly after to close out the year at around 37 USD per share.

Pfizer’s underperformance was unexpected. Especially considering it was the first company to receive regulatory approval for its vaccine.

Approval alone didn’t lift stock prices very high and Pfizer’s stock performance continued to be dampened with details regarding the vaccine’s distribution and administration. For example, the Pfizer/BioNTech vaccine needs to be kept at a temperature of -70C. Once it’s been delivered, jabs need to be used within 10 days. These steps add logistical layers that governments prefer to avoid. And avoid they can, with other vaccine options available, and ones that are not as complex to distribute and deliver.

Earlier this year, Pfizer announced that it expected to achieve $15bn of vaccine sales – that’s $2bn more than was initially expected.  That announcement resulted in the company’s earnings guidance rising by about 10 cents per share.

Pfizer’s Chief Financial Officer Frank D’Amelio stressed that achieving the double-digit operational revenue growth they want to see by Q4 2021 depended on a wide range of products that extended beyond the coronavirus vaccine.

Pfizer shares have only gained 5.55% as of April 2021. Trading at 36.28 USD it has moved -0.06% from the previous trading session.  Traders have been hoping that PFE gains some ground as it approaches its next earnings release on May 4, 2021.

Future outlook

There is a strong possibility that new versions of the vaccine will need to be released every year to deal with possible Covid-19 mutations. If vaccinated patients will also require booster shots as immunity subsides over time, both Pfizer and Moderna could stand to blow past revenue expectations. Demand for Moderna’s Covid-19 shot is still strong, and analysts still say Pfizer stock is a solid choice for longer-term portfolios.