Traditional drug manufacturers who hold a wide range of drugs in a portfolio and which report strong cash flow to continue to weaken. Gilead (NASDAQ:GILD), Regeneron (NASDAQ:REGN), and Pfizer (NYSE:PFE) are such examples.
COVID-19 vaccine developers are the market’s favorite now. Moderna (NASDAQ:MRNA) commanded a market capitalization of $69 billion at the end of last week. BioNTech (NASDAQ:BNTX) is catching up. And Novavax (NASDAQ:NVAX), which has yet to sell any vaccines, peaked at $331.68 recently. The stock traded at $6.77 at its 52-week low.
Relative valuations will matter as the world continues its rollout of the mRNA-based vaccine. Both BNTX and MRNA are the first choice. And since the virus will adapt over time, vaccine orders will continue at least annually. Not only does the Moderna vaccine require two doses 30 days apart but COVID-19 variants guarantee future vaccine orders annually.
Markets are pricing the value of all 7.7 billion people worldwide getting vaccinated. Some countries will opt for AstraZeneca’s (NASDAQ:AZN) inferior but less expensive vaccine. Rich nations will keep ordering Moderna’s advanced vaccine. Still, if China and Russia’s vaccine prove to be effective, demand for the most advanced vaccine may weaken.
For now, Moderna’s prospects in the COVID-19 vaccine, plus its therapeutics in cancer and other virus pathogens, suggest a market capitalization of over $70 billion.
