Vaccine Makers Slump as Moderna, Pfizer Leave Full-Year Guidance Intact

(Bloomberg) -- Shares of shot makers reversed early losses after comments by the Federal Reserve Chair triggered renewed confidence in growth stocks.

The shares had slid early in the day after Moderna Inc. and Pfizer Inc. left their annual outlook unchanged despite first-quarter sales that beat estimates. Smaller peers and former retail-trading favorites also gained, with Inovio Pharmaceuticals Inc. rising 3%, while Vaxart Inc. and Arcturus Therapeutics Holdings Inc. advanced roughly 5%, reversing similarly sized drops.

Among the leading vaccine makers, BioNTech SE, which reports next week, rose 1.8% on Wednesday while U.S. partner Pfizer ended up 0.8%. And Novavax Inc., whose Covid shot could face a Food and Drug Administration advisory panel in June, staged a late afternoon rally to end the day up 6.5%. Moderna reversed losses to rise to a nearly three-week high, even after the Cambridge, Massachusetts-based company warned there was “potential downside” to its 2022 vaccine orders on contract timing during its earnings call.

The group of vaccine makers extended the week's gains after Pfizer's first-quarter report that was released amid rising hospitalizations in New York State and recent lockdowns in China.

While many of the Covid-tied stocks are down nearly 40% for the year, Pfizer's diversified portfolio and large-cap drugmaker status has shielded it from such a steep drop. The group has suffered amid a broader biotechnology selloff driven by the larger macro rotation away from risky growth stocks. They've also taken a hit as the market tries to estimate the scope for existing and future Covid vaccines sales as the pandemic nears an end.

Moderna's first-quarter revenue of $6.1 billion handily beat estimates by nearly 30%, but leaving its full-year guidance intact suggests that “a major reduction in 2Q consensus is needed,” according to Bloomberg Intelligence analyst Sam Fazeli.

However, the firm's stock doesn't look that cheap since it's still trading at a $40 billion enterprise value, said Jefferies strategist Will Sevush.

“The thesis hinges on the public's willingness to take a fourth booster of a vaccine with limited efficacy against circulating variants in the face of a potential Fall wave,” he said.