The lack of clarity around the vaccine schedule this fall is hurting drug companies. Moderna (MRNA) and
BioNTech (BNTX) lost momentum in the last month. Moderna is especially compelling compared to
BNTX stock. It has a bivalent vaccine ready for the market. It also has a richer pipeline.
BioNTech relies solely on the Covid vaccine for its growth. It needs strong sales to benefit Pfizer (PFE), its
commercial partner. Both stocks are lower because investors worry that vaccine sales will fall further.
To double in return, investors need to buy those stocks at a bigger discount. They need a catalyst to
unlock the stock value. For example, shares may need to fall by 20% to 50%. From there, the virus needs
to spread or mutate. Then the government must consider an aggressive vaccine schedule to prevent its
spread.
Investors need to establish a discount or margin of safety on vaccine stocks. AstraZeneca (AZN), Pfizer,
Moderna, and BioNTech are the biggest players in this space. Novavax (NVAX) is too late in the game. Its
chances of success continue to shrink.
Your Takeaway
The double return is the difference between the price paid and the stock’s rise. The stock will bottom
when countries commit to a vaccine schedule in the quarter and year ahead.
