Amid the pandemic, there are dozens of players racing to find a coronavirus vaccine, from small private companies to biotech giants like Moderna (MRNA) - Get Moderna, Inc. Report and Pfizer (PFE) - Get Pfizer Inc. Report.
Let’s break down the major players:
Moderna has announced it has a $1.52 billion deal with the U.S. government to produce 100 million doses of a COVID-19 vaccine. This is part of the government’s effort to provide free vaccines to citizens. The revenue implications for the $27 billion by market cap Moderna are several billions of dollars. The stock has jumped 260% year-to-date, as the company is seen as a potential market share leader for a drug that it is moving along quickly in the approval process.
Pfizer and BioNtech (BNTX) - Get BioNTech SE Sponsored ADR Report have a partnership. Remember, biotech companies lean on each other for drug partnerships to use each other’s tech and research. And for the smaller guys, they’re learning on the larger players’ scale and reach for distribution. The two companies have a $195 billion deal with the U.S. government to produce 100 million doses by the end of 2020 and up to 1.3 billion doses by the end of 2021.
Pfizer is a more than $200 billion company by market cap and it has many drugs and products on the market that are built into that valuation. Still, this is a meaningful opportunity for the company and while the stock is flat year-to-date, it’s up 18% since June 26, less than a month before the big deal announcement.
Gilead Sciences (GILD) - Get Gilead Sciences, Inc. (GILD) Report was the first to say it was developing a COVID-19 vaccine. The stock ran up earlier in 2020 but is only up 4.5% for the year to August 14, as it’s clear now that market share will be divided up amongst many players.
Other players in on the vaccine race include AstraZeneca AZN and Regeneron (RGN) , which is up 62% this year.
The point: There are several large biotech companies progressing on getting a vaccine to market, which has substantial implications for the economy and stock market.