Pfizer’s FDA approval is boosting these stocks
Since 2020, investors have been rallying behind shares of Pfizer (PFE) and Germany’s BioNTech (BNTX), two companies that were poised to play a crucial role in helping bring an end to a devastating pandemic. Those bets have paid off.
What’s happening: On Monday, the US Food and Drug Administration granted full approval to the Pfizer-BioNTech coronavirus vaccine for people aged 16 and over. It’s the first vaccine to receive this designation. Pfizer shares gained 2.5%, while BioNTech’s stock jumped 9.6%. Step back: Since last December, when the vaccine received its first emergency use authorization from the UK government, allowing for the start of immunization campaigns, Pfizer’s stock has climbed roughly 30%. BioNTech shares are up about 207% during the same period. Vaccines usually aren’t the most profitable product for Big Pharma, particularly when compared to drugs used to treat chronic conditions.
But the scale of the pandemic is generating tons of revenue. In a note published Monday, Morningstar analyst Karen Andersen said she sees sales of the Pfizer shot reaching $35 billion in 2021 and $39 billion in 2022. After that, she forecasts $2 billion in annual sales, as the most vulnerable continue to receive shots. FDA approval could further boost demand, though Andersen thinks existing contracts will cover any spike in interest. “[The FDA] has now reviewed six-month safety data from thousands of patients in the phase 3 trial,” Andersen wrote. “This could encourage some individuals who were uncertain about the long-term safety of the vaccine to get vaccinated.” Full approval also paves the way for additional vaccine mandates. The deadline for United Airlines (UAL) employees to get vaccinated or lose their jobs was bumped up Monday after the FDA announcement. CVS Health (CVS) also said Monday that it will require vaccinations for nurses, care managers and pharmacists.
“We also expect this approval to give more leverage to public and private organizations wishing to mandate vaccination, including universities and hospitals,” Andersen wrote. Watch this space: Pfizer and BioNTech aren’t the only stocks benefiting from vaccination campaigns that could safeguard the economic recovery. Investors are also piling into travel stocks and movie theaters following the FDA news. On Monday, shares of American Airlines (AAL) rose 3.3%, while Delta Air Lines (DAL) climbed 2.9%. Shares of British Airways owner IAG rose 3% Tuesday in early trading in London, while easyJet’s stock jumped more than 4%. Marriott (MAR) increased 2.3% Monday, while Hyatt (H) gained 1.9%. AMC Entertainmen (AMC)t rose almost 7%, while Cinemark (CNK) rallied 8%.