When it comes to understanding the rapidly emerging issues that are facing an industry, it pays to listen to what the leaders of the top companies are saying. Even if they disagree with one another, they can still shed a lot of light on the challenges that their companies and their shareholders will need to navigate.
In that vein, in the days that followed the discovery of the potentially vaccine-evading omicron variant of SARS-CoV-2, the chief executives of Moderna (NASDAQ:MRNA), Pfizer (NYSE:PFE), and BioNTech (NASDAQ:BNTX) weighed in on the pandemic's latest complication. While it's too early to say that there's a consensus, there are definitely a few points of agreement, not to mention a handful of hints about how their companies are pivoting to address the new threat. Let's see what they had to say and examine why it's relevant for investors.
Omicron might be a game-changer for the worse
Stéphane Bancel, CEO of Moderna, rattled markets when he told the Financial Times on Nov. 29 that "I think it's going to be a material drop," referring to the efficacy of his company's jab against the omicron variant.
Worse yet, Bancel's takeaway from discussions with his company's scientists was that "This is not going to be good." In particular, he worried that Moderna's shot wouldn't perform as well as it had against the delta variant. He also confirmed that Moderna is already working on adapting a new version of its vaccine to combat omicron.
Per his other remarks to CNBC on Monday, Bancel also holds that omicron has already spread worldwide. Given that the first case of omicron in the U.S. was confirmed only on Wednesday, his comment was prescient.
If the variant is confirmed to be extra infectious, as Bancel suspects, or extra dangerous to vaccinated people, most countries will be looking for a mitigation solution like additional doses or variant-specific booster shots soon enough.
Looking on the brighter side
Not everyone shares Bancel's gloomy perspective.
Pfizer's CEO, Albert Bourla, made a few key comments to CNBC on Nov. 29. On vaccine efficacy, he said, "I don't think that the result will be the vaccines don't protect, [but] I think the result could be, which we don't know yet, [that] the vaccines protect less." Importantly, Bourla said that Pfizer's variant-specific version of its jab, Comirnaty, could be ready for production within 100 days. That's roughly the same timeline proposed by Moderna's CEO, so the pair are in a vaccine development race once again.
Bourla was also strident that Pfizer's antiviral pill, Paxlovid, which is in development to treat people at risk of developing severe COVID-19, should perform just as well against omicron. As a result, investors can continue to expect Pfizer's coronavirus medicine revenue to increase next year, assuming Paxlovid gets approved.
BioNTech's CEO, Uğur Şahin, struck a similarly optimistic tone with Reuters on Nov. 30, saying, "We think it's likely that people will have substantial protection against severe disease caused by omicron." Later, Şahin went even further, saying, "To my mind, there's no reason to be particularly worried." Let's hope he's right.
What are the implications for investors?
It looks like Pfizer and BioNTech are largely in alignment about the possible outcomes for their jointly developed vaccine's performance against omicron. Even if their framing of the issue is more positive than that of Moderna's leader, all three CEOs are fundamentally saying the same thing: The existing jabs are likely to be less effective against the variant.
But how less effective will they be, and what will need to happen to make up for the difference?
Until that question is answered, omicron's actual medium- and long-term impacts for shareholders in vaccine companies remain unclear. If it appears that people can maintain their level of protection against severe disease by simply getting booster shots of the original vaccines produced by Pfizer, BioNTech, and Moderna, it'll lead to more sales quite soon, when governments move to secure a supply of additional doses.
On the other hand, if people's immunity isn't sufficient to protect against infection or severe disease caused by omicron even after a booster shot, it'll make the ongoing efforts to develop a variant-specific shot all the more relevant. In that case, the company that can get its new doses out the door first will have an advantage when it comes to taking and filling orders from national healthcare authorities.
One thing's for sure: At least one of the CEOs is going to have his outlook vindicated as soon as more is understood about the omicron variant. But to find out which one got it right, we'll have to wait a couple of weeks for more information.