What happened
This week isn't ending on a positive note for several COVID-19 vaccine makers. Shares of Moderna (MRNA 1.04%) had tumbled 8.3% lower at 11:31 a.m. ET on Friday. Novavax (NVAX 7.85%) and BioNTech (BNTX 1.27%) stocks were down 6.7% and 6%, respectively.
Perhaps the most likely culprit behind the declines in these vaccine stocks is that investors are worried that the U.S. government won't purchase additional COVID-19 vaccine doses. Moderna CEO Stéphane Bancel stated in an interview with Yahoo! Finance yesterday that his company is preparing "for a private-market situation."
In addition, Endpoints News reported this morning that an anonymous Biden official revealed concerns that the U.S. Congress might not move forward with additional funding needed to purchase more vaccine doses. The Biden administration has been lobbying for these funds, saying in a public statement last week, "Without funding, the United States will not have enough additional boosters or variant specific vaccines, if needed, for all Americans."
So what
It's probably inevitable that the U.S. government will eventually step back from purchasing COVID-19 vaccines. However, investors weren't counting on this happening until the pandemic had clearly ended.
The fortunes of Moderna, Novavax, and BioNTech ride entirely on their COVID-19 vaccines, at least for now. Any indication that the companies could have a harder time selling their vaccines presents a valid reason for concern. And there's a pretty good case to be made that COVID-19 vaccine sales would fall in a fully private market in the U.S.
Image source: Getty Images.
Nearly 77% of Americans ages five and older have received at least one COVID-19 vaccine dose so far, according to the Centers for Disease Control & Prevention (CDC). The number is even higher -- 88% -- for adults ages 18 and older. But these doses were free to all Americans. If there had been even a nominal cost, the percentages would almost certainly be significantly lower.
Also, the costs of vaccines will increase in a private market. Bancel acknowledged on Thursday, "In an endemic setting, I believe Moderna's average price for the vaccine will be higher than it's been over the past two years." You can expect BioNTech (along with its partner, Pfizer) and Novavax to take a similar stance.
Now what
Investors could be making much ado about nothing, though. China and Europe are experiencing another surge in COVID-19 cases. The U.S. could be next. It seems unlikely that the U.S. Congress would refuse to fund additional purchases of vaccine doses if there's another coronavirus wave.
Of course, Novavax has an even bigger fish to fry. The company still awaits U.S. Emergency Use Authorization for its COVID-19 vaccine. The U.S. Food and Drug Administration appears to be slow-walking the authorization for now.
Sooner or later, Moderna, BioNTech, and Novavax will probably have to deal with a shift to a private market for COVID-19 vaccines in the U.S. If I were a betting person, though, I'd wager that transition won't happen this year.
