Moderna (MRNA) and Novavax (NVAX) fell sharply in the last week. Investors gave up on their long-term bullish view on Covid vaccine makers. They are betting that Delta’s spread will ease further and that Omicron will dominate.
People infected with Omicron have milder symptoms. As scientists study its pathogenicity and worldwide numbers, they will determine if Omicron results in a dual hybrid vaccination. They may find that vaccination will lower the risk of hospitalization. Furthermore, Omicron may boost a person’s immunity, offering better long-term protection.
BioNTech, MRNA, and Novavax are lower on expectations that vaccination rates will fall. Investors have another investment opportunity with Covid antiviral drugs. Merck (MRK) has a pill that has more side effects than that offered by Pfizer (PFE). Still, both companies arm hospitals with another way to prevent people from getting sicker.
While MRK and PFE stock are good investments, investors should not assume vaccine makers will underperform. The virus may become a seasonal endemic. It will require at least an annual booster shot to keep it that way. BNTX, MRNA, and NVAX valuations are unfavorable at this time. Wait for the market to finish taking profits in those companies.
As stocks in this sector bottom, patient investors may start a small position.
