Please ensure Javascript is enabled for purposes of website accessibility

Why Moderna, Vaxart, Inovio, and BioNTech Stocks Dropped Today

By Joe Tenebruso – Jul 24, 2020 at 7:31PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

COVID-19 vaccines might not be the moneymakers investors are hoping for.

What happened

Investors sold off shares of several coronavirus vaccine-related stocks on Friday as lawmakers ramp up pressure on drugmakers.

By the close of trading, shares of Vaxart (VXRT 3.83%), Inovio Pharmaceuticals (INO 6.02%), BioNTech (BNTX 2.08%), and Moderna (MRNA 2.12%) were down 11.3%, 10.9%, 4.9%, and 2.8%, respectively.

So what

In hearings that took place this week, lawmakers grilled drug companies on their pricing plans for their potential vaccines, with some going so far as to ask executives at companies including Moderna, Johnson & Johnson, and AstraZeneca if they would supply their vaccines at cost. "We will not sell it at cost, no," Moderna President Dr. Stephen Hoge said during a congressional hearing on Tuesday. 

A person points to a digital stock chart that rises, then falls.

Investors took some profits in COVID-19 vaccine stocks on Friday. Image source: Getty Images.

While executives from other pharmaceutical companies also largely declined to agree to provide their potential vaccines at prices that would provide them with zero profits, the pressure from Congress to do so appears to be rising.  

Now what 

Even shares of BioNTech -- which, along with its partner Pfizer, locked up a nearly $2 billion order for its COVID-19 vaccine candidate from the U.S. government on Wednesday -- saw its shares fall. Investors could be growing concerned that future deals may be negotiated more fiercely, and potentially at prices that could make profits difficult to come by.

This recent political pressure should serve as a reminder to investors: To successfully invest in vaccine makers, you'll need to determine not just which experimental COVID-19 vaccines will gain regulatory approval, but also whether the prices they can be sold at justify their company's stock valuations. Neither task is particularly easy.

Joe Tenebruso has no position in any of the stocks mentioned. The Motley Fool recommends Johnson & Johnson. The Motley Fool has a disclosure policy.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Inovio Pharmaceuticals, Inc. Stock Quote
Inovio Pharmaceuticals, Inc.
$1.76 (6.02%) $0.10
Moderna, Inc. Stock Quote
Moderna, Inc.
$122.23 (2.12%) $2.54
BioNTech SE Stock Quote
BioNTech SE
$130.30 (2.08%) $2.65
Vaxart, Inc. Stock Quote
Vaxart, Inc.
$2.17 (3.83%) $0.08

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 09/27/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.