2 Stocks to Avoid on Pfizer's Announcement of a Successful Covid Antiviral Pill

With Pfizer’s (PFE) COVID-19 antiviral pill getting significant attention, its competitors such as Moderna (MRNA) and Novavax (NVAX) are losing ground. So, it could be wise to avoid MRNA and NVAX now.

While the delta variant-led surge in COVID-19 cases have decreased over the past few months in the United States, the pandemic seems to be far from over. As the cold weather sets in, people are getting concerned about a resurgence of cases. Investors were optimistic as it was announced on November 5th that Pfizer Inc.’s (PFE) COVID-19 pill, when used in combination with a widely used HIV drug, cut the risk of hospitalization or death by 89%.

However, this might not bode well for other COVID-19 antiviral developers and vaccine makers. Geoffrey C. Porges, MBBS, director of therapeutics research and a senior research analyst at SVB Leerink, said on November 5, “This result is clearly good news for Pfizer shareholders, and initially negative news for the developers of other COVID antivirals.”

With PFE potentially leading the COVID-19 antiviral race, it could be wise to avoid COVID-19 vaccine makers Moderna, Inc. (MRNA) and Novavax, Inc. (NVAX).

Moderna, Inc. (MRNA)

Biotechnology company MRNA develops therapeutics and vaccines based on messenger RNA to treat infectious, immuno-oncology, cardiovascular, auto-immune, and other rare diseases. It has around 13 programs in clinical trials and a total of 24 development programs. In addition, it is engaged in developing COVID-19 vaccine mRNA-1273.

On November 9, 2021, France's public health authority recommended that people under 30 be administered PFE’s Comirnaty COVID-19 vaccine instead of MRNA’s Spikevax jab, owing to comparatively higher risks of heart-related problems. This is likely to harm the company’s future growth prospects.

MRNA’s total revenue for the third quarter (ended September 30, 2021) came in at $4.97 billion, up 3,065% year-over-year. However, its total operating expenses increased 259.9% year-over-year to $1.41 billion. Its total liabilities came in at $10.80 billion for the period ended September 30, 2021, compared to $4.78 billion for the period ended December 31, 2020. Also, its total liabilities and stockholders’ equity came in at $20.92 billion, compared to $7.34 billion, for the same period.

Analysts expect MRNA’s revenue to increase 10% year-over-year to $19.54 billion in fiscal 2022. However, its EPS is expected to decline 0.4% year-over-year to $26.26 next year. Over the past three months, the stock has lost 51.1% to close yesterday’s trading session at $236.85.

Novavax, Inc. (NVAX)

NVAX is a biotechnology company focused on discovering, developing, and commercializing vaccines to prevent serious infectious diseases and address health needs. Its under-trial vaccine includes the RSV F vaccine. Also, it is engaged in developing the COVID-19 vaccine NVX-CoV2373.

The Schall Law Firm announced on November 9 that it is investigating claims on behalf of NVAX’s investors for potential violations of the securities laws. This is concerning the article published by Politico on October 19, 2021, titled, “They Rushed the Process: Vaccine Maker's woes hamper global inoculation campaign.”

For the third quarter ended September 30, 2021, NVAX’s revenue increased 13.9% year-over-year to $178.84 million. However, its net loss came in at $322.43 million compared to $197.31 million in the prior-year period. Its loss from operations came in at $307.14 million, compared to $193.94 million in the year-ago period. Also, its loss per share came in at $4.31, up 34.3% year-over-year.

NVAX’s EPS is expected to decrease 59.8% year-over-year in the current year and remain negative. It missed the consensus EPS estimates in three of the trailing four quarters. Over the past nine months, the stock has lost 46.4% to close yesterday’s trading session at $169.30.

PFE shares were trading at $48.94 per share on Wednesday afternoon, up $1.64 (+3.47%). Year-to-date, PFE has gained 38.15%, versus a 25.99% rise in the benchmark S&P 500 index during the same period.

About the Author: Riddhima Chakraborty

Riddhima is a financial journalist with a passion for analyzing financial instruments. With a master's degree in economics, she helps investors make informed investment decisions through her insightful commentaries.


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