Moderna, Pfizer slip despite strong earnings results as U.S. backs idea of waiver for vaccine patents
While both Moderna (MRNA) and Pfizer (PFE) reported better than expected earnings per share this week, the stocks are under pressure on Thursday following reports saying the U.S. is supporting a proposal to waive intellectual property protections for COVID-19 vaccines. Meanwhile, German Chancellor Angela Merkel has made known she is opposed to the proposal, arguing that such a plan would create "severe complications" for the production of vaccines.
MODERNA RESULTS: Moderna reported first quarter earnings per share of $2.84, which was better than the expected $2.39, and revenue of $1.94B, with consensus at $2.04B. "Based on these first quarter accomplishments and our current manufacturing scale-up trajectory, we were pleased to again increase our base plan for 2021 to 800 million doses. The Moderna team and our manufacturing partners are working hard to get as close to 1 billion doses in 2021 as we can. The feedback from governments around the world requesting high-efficacy mRNA vaccines and variant boosters is overwhelming. We are now actively engaged in discussions and agreements for 2022 with all of the governments we are currently supplying for 2021. On top of that, new partnerships, like COVAX, for up to 466 million doses in 2022 and discussions with new governments in Asia, Middle East, Africa and Latin America, make us believe that our total advance purchase agreements for 2022 should be higher than those in 2021," said Stephane Bancel, Chief Executive Officer of Moderna.
On Wednesday, Moderna had also announced initial data from its Phase 2 study showing that a single 50 microgram dose of mRNA-1273 or mRNA-1273.351 given as a booster to previously vaccinated individuals increased neutralizing antibody titer responses against SARS-CoV-2 and two variants of concern, B.1.351 - first identified in South Africa - and P.1 - first identified in Brazil. A booster dose of mRNA-1273.351, the company's strain-matched booster, achieved higher neutralizing antibody titers against the B.1.351 variant of concern than a booster dose of mRNA-1273. A manuscript describing these preliminary results has been submitted as a preprint to bioRxiv and will be submitted for peer-reviewed publication upon completion of the multivalent mRNA-1273.211 booster arm.
PFIZER RESULTS: Earlier this week, Pfizer reported first quarter adjusted earnings per share of 93c and revenue of $14.6B, both above consensus of 78c and $13.6B, respectively. The company also raised its full year 2021 adjusted earnings per share view to $3.55-$3.65 from $3.10-$3, and its full year 2021 revenue view to $70.5B-$72.5B from $59.4B-$61.4B. Pfizer maintained its second quarter dividend at 39c per share.
On Thursday, Mizuho analyst Vamil Divan downgraded Pfizer to Neutral from Buy with an unchanged price target of $42. The company delivered a "stunning beat and raise" in the first quarter, but the recent strength in the shares make meaningful upside more challenging, Divan contended. The analyst believes that while pipeline success "should be critical to drive further upside," the risk/reward for key assets is now more balanced.
IP PROTECTION: The U.S. will support a proposal to waive intellectual-property protections for COVID-19 vaccines, joining an effort to increase global supply and access to the life-saving shots as the gap between rich and poor nations widens, Bloomberg's Jenny Leonard and Eric Martin reported on Wednesday. "We are for the waiver at the WTO, we are for what the proponents of the waiver are trying to accomplish, which is better access, more manufacturing capability, more shots in arms," U.S. Trade Representative Katherine Tai said in an interview with Bloomberg.
Meanwhile, German Chancellor Angela Merkel said she is opposed to the U.S. proposal to waive patent protections for COVID-19 vaccines, stating that such a plan would create "severe complications" for the production of vaccines, according to Bloomberg, citing a German government spokeswoman. Without a profit incentive, drugmakers might not move as aggressively to make vaccines, the industry has argued.
PRICE ACTION: In afternoon trading, shares of Moderna and Pfizer have dropped almost 2% to $160.18 and $38.96, respectively. Other companies with approved or working on COVID-19 vaccines include BioNTech (BNTX), AstraZeneca (AZN), Johnson & Johnson (JNJ), Novavax (NVAX), Vaxart (VXRT) and CureVac (CVAC).