Pfizer and BioNTech’s COVID-19 Vaccine Proves 90% Effective
Vaccine Could Be Ready for Limited Distribution by December
A vaccine developed by Pfizer (PFE) and BioNTech (BNTX) has proven to be more than 90% effective in preventing COVID-19 infections. The companies say their vaccine could be ready for limited distribution as early as late December and for widespread distribution by the third quarter of 2021. This is welcome news for many as the US sets new records for daily cases and some parts of Europe implement new lockdown measures.
The vaccine will require two doses per person. The US government has a $2 billion agreement with Pfizer and BioNTech to supply an initial 100 million doses of the vaccine with an option for the government to buy an additional 500 million doses.
The Public’s Changing Perception of Pharmaceutical Companies
Pfizer and BioNTech are among many pharmaceutical companies racing to find a way to stop the virus that has infected over 50 million people worldwide. In recent years, the public’s perception of the pharmaceutical industry has been largely negative. Companies have been blamed for the opioid crisis and high drug prices. Now, as pharmaceutical companies’ efforts to develop a vaccine are in the spotlight, their reputations are getting a boost. Recent data shows that the industry’s net favorability has climbed from 13% to 17% this year. Among people with a bachelor’s degree and an income of $100,000, favorability rose from 17% to 28%.
This shift is causing pharmaceutical companies to change their branding strategies. Historically, companies like Pfizer have focused on branding for their individual products rather than for their own names, but this is changing. Pharmaceutical companies spent $180 million on corporate ads during the first six months of 2020 compared to $167 million during the first half of 2019. Spending on product ads declined slightly during the same period.
In its quest for a vaccine, the pharmaceutical industry has an opportunity to have a huge impact on people’s daily lives and on the economy. The industry also has the rare opportunity to reinvent itself in the eyes of the public.
Ripple Effects Across the Market
Pfizer and BioNTech’s shares soared 8% and 19% respectively on the news about their vaccine. Pfizer shares were up 7.61% at the end of the trading day yesterday and BioNTech shares were up 13.91% .
The news also had ripple effects across other industries. “Stay-at-home” stocks tumbled on the news. Zoom Video (ZM) fell 16%. Amazon (AMZN), Netflix (NFLX), Teladoc Health (TDOC), and Shopify (SHOP) also slid. In contrast, shares of airlines spiked. American Airlines (AAL) and United Airlines (UAL) both rallied about 16% on the news as investors considered the possibility that consumers may be able to return to pre-pandemic travel habits sooner than expected.
It will take time for the vaccine to be granted regulatory approval and for it to be widely distributed, but these results represent a significant step in the right direction. As Pfizer’s CEO Albert Bourla said, “I think we can see light at the end of the tunnel.”
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