How the future for COVID-19 boosters could impact vaccine names
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The outlook for vaccine maker stocks, which not so long ago was glowing, is increasingly turning less rosy.
A combination of factors is leading to the situation.
The first is that that additional boosters -- at least as the vaccines are currently formulated -- may not be as effective, especially against the Omicron variant. An Israeli study and a CDC study out this week threw water on the potential necessity of further boosters.

Second, given the large number of COVID cases in the past few months caused by the Omicron variant, herd immunity may become closer to reality in many parts of the U.S. and around the world as even those who are unvaccinated develop antibodies.
Third, even though all the COVID-19 vaccine makers have said they are working on Omicron-specific vaccines, the availability of those vaccines may arrive too late as the Omicron wave appears to have peaked on Jan. 15, according to CDC data.
On that date, the 7-day moving average of daily cases was ~799K. On Jan. 20, it was ~727K.
All of the companies making COVID vaccines are down year-to-date, but those companies whose revenue disproportionately relies on COVID vaccines -- Moderna (NASDAQ:MRNA), BioNTech (NASDAQ:BNTX), and Novavax (NASDAQ:NVAX) -- have especially been hit hard.
Pfizer (NYSE:PFE), Johnson & Johnson (NYSE:JNJ), and AstraZeneca (NASDAQ:AZN) are also down, but much more modestly in comparison, likely because their bottom lines are impacted by much more than vaccine sales.



However, the recent downturn in stock prices in these names might be temporary, and could provide a buying opportunity for some based on other assets in their pipelines, according to some Street analysts.
Yesterday, BofA Securities analyst Geoff Meacham upgraded Moderna from underperform to neural and upped his price target to $180 from $135 (~12% upside based on Friday's close).
Meacham says that with COVID moving from the pandemic to endemic stage, he is focused more on the company's rich pipeline and leadership in mRNA therapies, adding the company has $17B in cash to work with.
Although Novavax's vaccine was cleared in Australia earlier this week and recommended for approval by a European Medicines Agency panel last month, the stock has struggled of late.
However, Cowen sees brighter days ahead for the biotech and initiated the stock yesterday with an outperform rating and a $150 price target (~77% return based on yesterday's close).
Analyst Georgi Yordanov writes that as Novavax enters the COVID vaccine market, its vaccine's "differentiated" profile compared with better tolerability compared to mRNA shots could provide advantages.
He adds that the company's NanoFlu vaccine, in phase 3 for influenza in adults 65 years and older, can provide "downside protection." Also in phase 3, Novavax has the respiratory syncytial virus vaccine for infants via maternal immunization ResVax.
UBS sees the situation at BioNTech as less sanguine. Yesterday, the firm maintained its neutral rating, but cut is price target to $170 from $300 (~15% upside based on yesterday's close) arguing that the stock's pandemic premium trade is fading.
Like Moderna, BioNTech's COVID-19 vaccine is its only marketed product. However, BioNTech does has several mRNA oncology therapies in phase 2 in its pipeline.