Pfizer and Moderna created life-saving vaccines. So why are their shares crumbling?

All three stocks rose spectacularly in 2021, largely due to the success and strong sales of their COVID-19 vaccines. But 2022 hasn’t been so kind to them.

Shares of Pfizer are down about 15 percent, while its Comirnaty vaccine partner BioNTech is down 35 percent. Moderna has done even worse, by more than 40 percent.

Investors on Wall Street believe they may have bought overpriced stocks in the world’s largest vaccine manufacturers. (AP)

What gives? The sale of the COVID vaccines is not the problem.

Pfizer has said it expects Comirnaty’s revenues, which it shares equally with BioNTech, to reach $32 billion ($45.15 billion) by 2022, while Moderna has forecast it to reach nearly $20 billion ($28.22 billion). ) in revenue from its coronavirus injection this year.

Part of the reason for the stock’s collapse may simply be that investors were already anticipating strong demand and doing what traders do best: buy the rumor and sell the news.

Pfizer’s stock rose more than 60 percent last year. BioNTech shot up more than 215 percent in 2021, while Moderna’s shares rose nearly 145 percent.

Investors could benefit from what they believe was early access to the vaccine manufacturers. (AP)

Looking ahead, however, there may be some more gains associated with the vaccines, especially for the stocks of Pfizer and BioNTech.

Health regulators in the United States approved booster doses of the Pfizer/BioNTech injection for 5- to 11-year-olds earlier this week.

Pfizer could also get an extra boost from COVID treatments thanks to the antiviral pill Paxlovid, which was approved late last year.

Pfizer has said it expects $22 billion ($31 billion) in revenue from Paxlovid this year.

Pfizer was one of the first companies to have a vaccine widely approved by regulators. (AP)

Pfizer is arguably the best positioned of the three vaccine makers to thrive beyond COVID.

The company has been in a buyout of late and recently announced plans to acquire migraine drug maker Biohaven for nearly $12 billion ($17 billion) earlier this month.

“The deal is a good use of money for Pfizer, leveraging its sizeable war chest to diversify into an approved drug that gains market share and can grow revenue significantly,” CFRA Research analyst Stewart Glickman said in a report. the Biohaven news.

The acquisition follows a nearly $7 billion ($10 billion) deal late last year to buy Arena Pharmaceuticals, a company that develops drugs to treat immune-inflammatory diseases.

Pfizer also last year acquired cancer drug maker Trillium Therapeutics for more than $2 billion ($3 billion). And even after all these deals, the company still has about $24 billion (34 billion) in cash on its balance sheet.

Pfizer’s stock has had a difficult year so far, despite the products largely protecting large segments of the population from COVID-19. (Google Finance)

Pfizer’s diversification is a key reason why analysts expect the company’s revenue to rise nearly 30 percent this year and its earnings per share to rise more than 50 percent.

In contrast, Moderna, which isn’t nearly as diversified as Pfizer, has yet to find another big blockbuster. Nearly 97 percent of the company’s first-quarter revenue came from the COVID vaccine.

Moderna’s sales are expected to rise about 20 percent this year, but analysts predict a decline in profits.

CEO St├ęphane Bancel said during Moderna’s most recent earnings call with analysts earlier this month that two of the company’s main goals were to “extend beyond infectious disease vaccines into therapeutics” and to find merger candidates. Moderna is also working on vaccines for other viruses, such as HIV and Epstein-Barr.

Pfizer has responded to reports that a Queensland police officer has been hospitalized in Brisbane three days after receiving the company's coronavirus vaccine with blood clots.
Pfizer played a bigger role in Australia than intended after fears over the Astra Zeneca vaccine. (Getty)

But the company also recently suffered a major public relations blunder.

Moderna’s newly hired finance director was forced to resign after just days of employment following disclosure of financial irregularities under investigation at his former employer Dentsply Sirona, a maker of X-ray and other dental equipment.

BioNTech, like Moderna, is also a bit of a one-trick pony at the moment, as almost all of its first quarter revenue came from Comirnaty.

Pfizer generated only about half of its sales from the vaccine in the first quarter.

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