The media is hungry for eye-catching news headlines that the efficacy of Covid-19 vaccines will move drug stocks and the stock market. BioNTech’s (NASDAQ:BNTX) "final" efficacy of 95% is one such example. Moderna’s (NASDAQ: MRNA) 94.5% is also an eye-opener.
On Nov. 18, BNTX said that in the final analysis, its vaccine is 95% effective. The company filed for Emergency Use Authorization and the Food & Drug Administration will meet on Dec. 10 to discuss it. After swinging between $88 - $115 in the month, the stock may enter new highs in the coming days.
Speculators may look at BNTX’s $24-billion market capitalization as too low, given its revenue potential for the vaccine. If a bigger drug company wants to buy it out, the stock will look cheap from here. Vaccine development partner Pfizer (NYSE:PFE) may increase its investment in BNTX, benefiting the prospects of both firms.
After the big rally in other drug manufacturers, including AbbVie (NYSE:ABBV) or Johnson & Johnson (NYSE:JNJ), investors might sell those shares to book profits. It may bet on MRNA and BNTX stock attracting more buyers in the coming months, ahead of the vaccine distribution.
With a twice-yearly or once-annual vaccine administration, BNTX has solid recurring revenue ahead.
