New variants prompt surge in stock prices of Covid vaccines

The shares of companies developing Covid vaccines experienced an upward trend on Monday following the emergence of new variants of the virus in the U.S. and the upcoming release of updated shots in the fall.

Novavax’s stock jumped by more than 13%, while Moderna’s stock rose over 9%. BioNTech, the collaborator of Pfizer in developing Covid vaccines, witnessed a nearly 7% surge in its shares. Pfizer’s stock also saw a modest 1% increase.

Although these companies have faced challenges in recent months, with sales of Covid shots and treatments declining in the U.S., the prospect of launching new shots and the emergence of new virus variants have revitalized investor enthusiasm.

Among the new variants is EG.5, also known as “Eris,” which has become the predominant strain in the U.S. While it may possess a slight advantage in evading immunity from previous vaccinations and infections, experts do not anticipate it to be more severe.

Moderna, Pfizer, and Novavax have assured that their updated shots, specifically targeting the related omicron subvariant called XBB.1.5, will offer protection against Eris.

However, the efficacy of the new shots against a new omicron strain known as BA.2.86 remains uncertain. This variant has been detected in small numbers in the U.S., U.K., Denmark, and Israel. It is characterized by 36 mutations distinguishing it from the currently dominant XBB.1.5 variant.

To date, there is no evidence suggesting that BA.2.86 spreads faster or causes more severe infections than previous versions. Nonetheless, its emergence may increase the demand for vaccines and treatments that provide some level of safeguard against this highly mutated variant.