Recent data from Israel seems to indicate that the COVID-19 vaccine developed by Pfizer (PFE 1.10%) and BioNTech (BNTX +3.83%) is much less effective against the Delta variant than it is against the earlier prevalent coronavirus strain. In this Motley Fool Live video recorded on July 7, 2021, Motley Fool contributors Keith Speights and Brian Orelli discuss whether or not investors have anything to worry about with this lower efficacy.
Keith Speights: There's some early data from Israel that indicates that the Pfizer-BioNTech COVID-19 vaccine appears to be significantly less effective against this Delta variant. Israel reported 64 percent efficacy compared to around 95 percent efficacy initially that was reported for the Pfizer-BioNTech vaccine.
However, the Israeli Health Ministry said that the vaccine is still 94 percent, I think, effective in that area at preventing hospitalizations. What do you make of this report, Brian, and assuming that the Pfizer-BioNTech vaccine does turn out to be only around 64 percent effective against this Delta variant, what would that mean for Pfizer and BioNTech going forward?
Brian Orelli: This is real-world data, and that's great because, well, it reflects what happens in the real world, but it makes it hard to control. There's no placebo group, obviously. You have to compare it to people who haven't gotten the vaccine and then try to figure out whether those two groups are actually equivalent.
There's a lot of a little bit of hand-waving. You have to get the statisticians involved, you also have to get the epidemiologists involved. I think it's really hard to draw firm conclusions here. But let's assume that the conclusions are accurate: 64 percent is still effective.
You'll remember before we got any data, the FDA said it would authorize vaccines if they were greater than 50 percent effective. Obviously, 64 is higher than 50 percent. I would say 64 percent is still effective against the Delta variant.
Obviously, that means there's going to be some people are going to get sick from the disease, and that's obviously going to drive some boosters. On the other hand, if it's 94 percent effective against hospitalizations, I think that will probably drive some people to not get the boosters.
The same people who don't get the flu vaccine annually are probably going to see that my chances of getting sick are pretty low and so I'm not going to bother to get the booster because even if I do get sick, it's not going be that big of a deal.
Speights: Now Brian, do you think this is a story that really matters at this point for investors? I've noticed some of the stocks -- Moderna (MRNA 0.62%) has been down some and even though their vaccine actually wasn't evaluated in this Israeli study. BioNTech stock was down. Is this something that investors should really be paying attention to right now, or is it just too early?
Orelli: It's too early, but it's definitely something you should be paying attention to if you're invested in vaccine stocks because the need for boosters is going to drive the valuations in the next couple of years.
If we don't need boosters, evaluations are way too high, and if we do need to boosters, they're all right, and if we need a lot of boosters for years to come, then maybe they're even undervalued.
Speights: My take on this is that over the long run, the emergence of variants like the Delta variant is actually good news for Pfizer-BioNTech and Moderna and others, but especially the messenger RNA vaccine makers, because it will increase the likelihood that booster doses are needed on an ongoing basis with the emergence of variants.
I suspect, while this might seem bad news right now for Pfizer and BioNTech with its lower efficacy, all these companies are working on booster doses on various specific vaccines. This actually could be good news over the long run, I suspect.
Orelli: That's the irony there. The longer the vaccines work and the less they need variants, the better they work, actually the lower the valuations of the companies should be because that means they're not going to have their repeat sales.
Speights: I have an article out. Here's the thing. The worst-case scenario for Pfizer, BioNTech, Moderna was that their vaccines don't work. Well, they're past the worst-case scenario. But the second worst-case scenario is that their vaccines work too well. If they work too well, then they are not going to get those recurring sales that they want.
