What happened
Shares of the top COVID-19 vaccine makers were sinking on Thursday. Pfizer (PFE 0.40%) stock was down 2% at 11:06 a.m. ET. Shares of Pfizer's partner, BioNTech (BNTX +1.63%), were down 6.1%. Moderna's (MRNA +2.35%) shares had tumbled 6.8% lower.
But the three companies actually had good news. On Wednesday, a U.S. Food and Drug Administration (FDA) advisory committee voted unanimously to recommend Emergency Use Authorization (EUA) for the COVID-19 vaccines in young children -- ages 6 months to 4 years for the Pfizer-BioNTech vaccine and ages 6 months to 5 years for the Moderna vaccine.
So why are the vaccine stocks falling? Blame it on the overall market. All the major stock indexes were down sharply as investors worried about the economy.
NYSE: PFE
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So what
Most stocks fall when the stock market tanks. There's a pretty good case to be made, though, that Pfizer, BioNTech, and Moderna stocks shouldn't be hit very hard in the broader market sell-off. The companies' fortunes really aren't dependent on what happens with interest rates, inflation, or the economy in general.
BioNTech and Moderna currently generate all their revenue from their respective COVID-19 vaccines. Pfizer makes a significant amount of its revenue from the COVID-19 vaccine it developed with BioNTech. The company also has a broad lineup of other moneymaking drugs and vaccines. The sales of these products shouldn't be affected much by macroeconomic headwinds.
On the other hand, there's also an argument that the good news from the FDA advisory committee's recommendations shouldn't have been much of a catalyst for these stocks. Why? So far, the U.S. government has distributed fewer than 445 million doses of the Pfizer-BioNTech vaccine and fewer than 282 million doses of Moderna's vaccine. But its existing supply deals with the companies, especially with Moderna, include significantly higher numbers of doses.
NASDAQ: MRNA
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Sure, the U.S. government could opt to order more doses if the FDA grants EUA for these vaccines in the youngest children. However, it's also possible that the country will transition to a private vaccine market.
Now what
The FDA doesn't have to go along with the recommendations made by its advisory committee. However, it's likely that the agency will soon grant EUA for the Pfizer-BioNTech and Moderna COVID-19 vaccines in young children. The Centers for Disease Control and Prevention must also give the thumbs-up, which also seems to be a pretty safe bet.
However, the most important thing to watch for Pfizer, BioNTech, and Moderna is the dynamics of the COVID-19 pandemic itself. The companies are scrambling to complete testing for versions of their vaccines that target the coronavirus omicron variant. The emergence of a new strain of the virus could complicate matters.
There could also be a new rival on the way. Novavax (NVAX +0.74%) awaits an FDA EUA decision for its COVID-19 vaccine. Unlike the Pfizer-BioNTech and Moderna vaccines, Novavax's vaccine isn't based on messenger RNA technology. It instead uses protein subunits, an approach also used with other non-COVID-19 vaccines that have been available for years.
Also, overall market turmoil could continue to affect how Pfizer, BioNTech, and Moderna stocks perform. Even though these companies' business models largely insulate them from issues that affect other businesses, investors often don't make those distinctions when they're worried about losing money.
