Emergent BioSolutions (EBS) - Get Report shares fell on Monday after the White House relocated a Covid vaccine publicity event scheduled for Wednesday from the life-science company’s facility in Baltimore.
The move came after The New York Times reported Saturday that the government emptied almost 50% of its budget for the Strategic National Stockpile on anthrax vaccines from Emergent.
Last year, while the Trump administration said the stockpile was drawn down of basic supplies necessary for the COVID pandemic, Emergent got $626 million, according to the Times.
The event, which will honor the cooperation between Johnson & Johnson (JNJ) - Get Report and Merck (MRK) - Get Report to produce a Covid vaccine, will be held at the White House instead of Emergent’s plant. Emergent is working with the two companies to make the vaccine.
Emergent recently traded at $86.68, down 6.1%. It has dropped 26% in the past month. J&J recently traded at $157.76, up 1.1%, and Merck at $74.49, up 1.9%.
Morningstar analyst Damien Conover puts J&J's fair value at $158. The FDA’s clearance of J&J’s vaccine last month didn’t change his estimate, “as the vaccine will be distributed on a nonprofit basis,” he wrote last week.
“However, this remarkable speed to market (joining Pfizer (PFE) - Get Report/BioNTech’s (BNTX) - Get Report and Moderna’s (MRNA) - Get Report COVID-19 vaccines) shows the innovative power of the drug industry, a key pillar in the moats for the large drug firms.”
Further, “[while] the J&J vaccine looks effective, with a roughly 67% reduction in symptomatic disease, we view the competing vaccines from Pfizer/BioNTech and Moderna as more effective, with reduction levels closer to 95%,” Conover said.
“However, cross-trial comparisons are fraught with error, and J&J's Phase 3 trial included significant enrollment in South Africa, which is dominated by a tougher variant.”