Vax stocks down on patent newsPfizer stock recovers quickly after vaccine developer stocks take a hit following Biden announcing he is in support of waiving intellectual property rights for COVID-19 vaccines. Share prices end the week up 2.41%.
On Wednesday, President Joe Biden threw his support behind the waiving of intellectual property rights as it relates to the COVID-19 vaccines, angering pharmaceutical companies (and their investors). Pfizer fell nearly 5% in Thursday’s trading but closed the day down just over 1%, while Moderna dipped 12% and was less lucky in recovering losses. Both companies use the same mRNA tech to make their shots, the very tech that would be affected by the change. For months now, advocates for the proposal have argued that waiving these intellectual property rights is crucial given the prominence of COVID in low and middle income countries who have been left without the shipments the richer countries have scooped up. While infection rates in wealthier countries have dropped thanks to a swift vaccine rollout, infections are still rising in over 36 countries - including India, which has seen cases surge up to a catastrophic 400,000 a day.
The landmark proposal, which was jointly submitted by India and South Africa in October 2020, has been backed by more than 100 mostly developing countries, with the goal of facilitating the manufacture of treatments locally and boosting vaccination campaigns around the world. However, it’s controversial – and high-income countries such as Canada, the U.K, and the E.U. continue to block the proposal. Biden’s support for the move was quickly followed by an official statement from Katherine Tai, his top trade negotiator, who backed negotiations at the WTO.
read the statement.
Tedros Adhanom Ghebreyesus, the head of the WTO, tweeted:
and praised the “wisdom and moral leadership” of the U.S.. But not everyone is so keen. Albert Bourla, Pfizer CEO, warned on Friday that waiving patent protections could set off a race for raw materials around the world that would threaten the safety of producing COVID vaccines, potentially creating more problems than it solved. In a letter posted on LinkedIn, Bourla explained that infrastructure is not the bottleneck for quicker vaccine production, but rather that the restriction is “the scarcity of highly specialized raw materials needed to produce our vaccine.” The vaccine recipe, if you will, includes 280 different materials imported from 19 different countries, and without patent protections, entities with less knowledge and experience than Pfizer could start competing for those same ingredients to make their own, lower quality vaccine.
Bourla wrote, predicting that the proposed waiver “threatens to disrupt the flow of raw materials.”
But then, he would. Either way, Pfizer came out of it better than most, losing just -2.24% on the day of the announcement and recovering most of it back by Monday.
Pfizer in good health after vaccine boostPfizer jumps 3% on the back of COVID vaccine success, beating Q1 estimates by almost 50%.
Pfizer’s Q1 earnings reported adjusted earnings per share of $0.93, marking a year-over-year increase of almost 50% and surpassing analysts expectations of $0.77. The company’s revenue came in at $14.58 billion, up 44.6% from the same period last year and above expectations of $0.77.
Pfizer’s COVID vaccine was the star of the show, with first-quarter sales of the shot making up around 24% of its overall revenue for the quarter at $3.5 billion. The biopharm company received its vaccine authorization in the U.S. in December, and has since distributed millions of doses around the country with plans to deliver 300 million by the end of July. There has been some concern regarding the slowdown in vaccine rollouts that the U.S. is currently seeing as supply outstrips demand, but Pfizer CEO Albert Bourla dismissed fears, noting that it’s normal to see a slowdown once all the most willing have received the vaccine. The firm expects an increase in vaccinations one the FDA approves the shot for teens (expected to happen this month).
Pfizer also massively increased its projected revenue from its COVID vaccine, now expecting revenue to hit $26 billion, a big jump from the $15 billion it projected back in February. By 2022, the company plans to have the capacity to produce 3 billion doses and is currently in talks with various governments about distribution strategy.
Full year guidance got a lift as well, and Pfizer now expects adjusted diluted earnings of between $3.55 and $3.65 per share, up from the last forecast of $3.20 at the top end. Full year revenue is projected to come in at between $70.50 billion and $72.5 billion, up from its previous forecast of $61.4 at the top end.
Pfizer shares have risen over 18% since March 2021, when the vaccine program really got underway, and the Pfizer vax is currently the most popular in the U.S. with 131 million people already receiving the shot, compared to 109 million for Moderna, and fewer than 8 million for J&J. Go Pfizer.
said the company’s CEO, Albert Bourla, in a statement.