Shares of BioNTech (BNTX 0.94%) were plunging 19.8% as of 11:12 a.m. EDT on Friday. The steep decline came after Pfizer (PFE 0.84%) announced positive results from a late-stage study of its experimental COVID-19 pill Paxlovid.
Pfizer reported that the risk of hospitalization or death was reduced by 89% in high-risk adults receiving Paxlovid compared to individuals receiving placebo. Through day 28 of the study, there were no deaths in patients who received the COVID pill compared to 10 deaths in the placebo group.
Why would Pfizer's positive results weigh so heavily on BioNTech's shares? Investors appear to believe that the availability of another highly effective COVID pill could hurt the demand for vaccines. Merck and its partner, Ridgeback Biotherapeutics, announced positive results for their COVID pill last month.
BioNTech wasn't the only vaccine stock that took a hit with Pfizer's update. Shares of Moderna and Novavax were also sinking today. The conventional wisdom that COVID pills could hurt vaccine sales might not be on point, though.
It seems unlikely that governments across the world will retreat from their vaccination strategies just because oral therapies are available. Also, the price tag of the COVID pills will be significantly higher than the costs of vaccine doses. For example, the U.S. government is paying around $700 per treatment course for Merck's COVID pill. By comparison, the cost for one dose of the Pfizer-BioNTech vaccine is only $19.50.
Pfizer plans to file for Emergency Use Authorization of Paxlovid soon. Even if it wins authorization (which seems likely), BioNTech's prospects should be solid. Investors can look forward to the company potentially providing some good news of its own when BioNTech announces its third-quarter results next week.