Are the vaccines worth investing in?

The ongoing roll-out of several Covid-19 vaccines around the world has allowed people to begin thinking properly about life after the coronavirus and how we might get back to normal.

Nevertheless, while the number of vaccinations has gathered pace over the past few months, there is still some way to go before the pandemic is brought to heel.

As such, investors might be wondering whether some of the major players in the vaccine production effort could still have some upside potential.

Below, we highlight several of the industry’s best-known names and consider whether they still have room for growth in 2021.

Listen to the latest Digest & Invest Podcast to hear eToro Market Analyst Henry Ward discuss the companies behind the vaccines.

Is first best for Pfizer?

The Pfizer-BioNTech vaccine was the first to receive official approval by a Western government when the UK regulator MHRA authorised BNT162b2 for use in December after the company reported a 95% vaccine efficacy rate. The US drugmaker immediately announced plans to produce 50 million doses by the end of 2020 and a further 1.5 billion doses of the vaccine during 2021.

In its full-year results in early February, the company revealed full-year revenues of $41.9bn – up 3% from 2019 – in what chairman and CEO Albert Bourla called a “transformational year” for the company.

Bourla said last year had marked the culmination of a decade-long transition to a “pure-play, science and innovation-focused company” following the spin-off of Pfizer’s Upjohn business during Q4, which had allowed it to move quickly and develop the Covid vaccine with BioNTech.

In Q4 alone, the drugmaker reported Q4 revenues of $11.9bn, up 11% year-on-year, once sales of the BNT162b2 vaccine were included.

That said, its share price in mid-February was only marginally higher than a year earlier, which could signal an opportunity for investors. 

In its updated financial guidance, Pfizer has forecasted revenues of $59.4bn-$61.4bn and income of approximately $2.2bn. The mid-point of forecasted revenues would represent a 44% growth on 2020. Revenue forecasts are expected to include $15bn in revenue from sales of BNT162b2.


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Can GlaxoSmithKline shine outside of the spotlight?

While many had expected GlaxoSmithKline – one of the UK’s best-known pharmaceutical companies – to be involved in the manufacture of the Oxford university Covid-19 vaccine, it found itself overlooked in favour of rival AstraZeneca. Yet, it is continuing to work with other partners to develop other treatments and is partnering with CureVac to develop a next-generation Covid vaccine to tackle multiple variants.

Nevertheless, there could still be time for GlaxoSmithKline to shine giving its leadership in other areas as the end of the pandemic nears.

The company announced sales of £34bn last year thanks to key growth drivers in its HIV, respiratory, oncology and consumer healthcare product streams despite the disruption caused by the coronavirus.

Furthermore, the company announced significant progress on its biopharma pipeline with more than 20 assets in late-stage clinical trials and more than 20 new product launches planned by 2026, including 10 with potential peak annual revenues of over $1bn.

Despite the coronavirus disruption, CEO Emma Walmsley said progress with its strategic objectives “remains firmly on track” including the separation into standalone biopharma and consumer healthcare companies, which would see annual cost savings of £300m and £1.1bn in divestment proceeds.

Yet, as governments continue to prioritise the pandemic, the company expects an impact on its vaccines business.

Indeed, as its results were announced the share price fell by 7.5% from 1,368p to 1,282p at close on 3 February — are investors just biding their time?


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No more tears with Johnson & Johnson

While it may have been overshadowed by the approval of vaccines by Pfizer and AstraZeneca, Johnson & Johnson’s single-shot offering prevented 66% of moderate-to-severe cases and a significant number of orders.

The company recorded strong Q4 sales of $22.5bn – up 8.3% year-on-year – contributing to full-year sales of $82.6bn, at its annual results in January.

Net earnings were down, however, falling by 56.7% year-on-year to $1.7bn from $4bn as the pandemic took a toll on elective procedures in its medical devices business and reduced demand for some of its pharmaceutical and consumer health products.

Nevertheless, the share price rose from $165.98 to $170.48 when the results were announced, but fell back to around $166 by mid-February. 


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Novavax rolling towards approval?

Achieving 89.9% efficacy, the Novavax Covid-19 vaccine has made headlines for its strong response to the more contagious UK and South African variants.

News that it was to begin a rolling review process with several regulators at the same time as phase-3 trials in the US and UK, saw its share price jump 3.3% from $280.92 to $290.18.

The rolling review of non-clinical data and early clinical studies could help expedite the review process — and boost its share price further. 


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One-shot at success for CanSino Biologics

Finally, Chinese vaccine manufacturer CanSino Biologics might not be one many investors are familiar with, but it was the first to gain approval to begin clinical trials in March 2020, just as the coronavirus was beginning to take hold around the world.

Its efficacy rate of 65.7% was one of the highest for a single-shot vaccine, unlike many of its peers, which have higher efficacy over two shots.

It has made headlines by signing deals with Pakistan and rolling out distribution to Mexico, as well as conducting a trial with the Russian Covid-19 vaccine, Sputnik.

With an already 376% share price increase for this Hong Kong-based stock, it could be one to watch for investors.


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