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We definitely had great news yesterday on the novel coronavirus vaccine being developed by Pfizer (NYSE: PFE) and Germany’s BioNTech (NASDAQ: BNTX).
Let’s assume the Pfizer vaccine is approved. Then it gets a little dicey from a safety viewpoint. Here’s why . . .
Approval of a vaccine by the FDA usually requires inspection of the vaccine’s manufacturing plants.
However, this will not be the case with Covid-19 vaccines.
They will get a pass on FDA plant inspections. As candidates reach the final phases of testing, emergency use authorization will be granted without pre-approval inspection.
Under normal circumstances, the FDA requires several batches of vaccines to be made. All batches must meet the same safety, consistency, and potency standards using the same facilities as will be used to sell the vaccines. This requirement prevents quality control issues with the pharmaceutical company.
Several of the leading vaccine candidates – including the Pfizer vaccine – use entirely new technology. It is technology, I might add, that has not been previously approved for human use.
Verification of a new manufacturing process yielding the desired product is the norm. But in our current circumstances, the FDA will forgo stability tests of the new vaccines.
So, let’s hope the pharmaceutical companies making Covid vaccines follow their normal high quality-control standards.
We don’t need a repeat of the Cutter laboratory vaccine disaster. In 1955, children ended up receiving vaccines with live polio viruses and not inactivated viruses. Some children got the disease and several died.
The Big News
U.S. Manufacturers Give Biden an Early Thumbs Up
Jay Timmons, CEO of the National Association of Manufacturers (NAM) gave Biden an early thumbs up. Timmons said the NAM was “very encouraged” that Biden had appointed a Covid-19 task force and “focused like a laser on this national crisis in his first address to our nation.” Manufacturers had privately voiced frustration in recent months at the mixed messages from the White House on measures such as masks to combat the pandemic, which they see as being essential to accelerating the country’s economic recovery.
Novavax Gets FDA Fast-Track Nod
Novavax has secured “fast-track” designation from the FDA for its Covid-19 vaccine. The company’s experimental vaccine is based on the whole of the Sars-Cov-2 spike protein rather than just a part of it. It will begin phase 3 trials in the U.S. and Mexico this month. It already is in phase 3 trials in the UK. Its shares have soared more than 20-fold this year.
China Vaccine Fail
Brazil suspended final stage trials of Chinese-made coronavirus vaccine CoronaVac. Sinovac had been at the forefront of China’s efforts to win the global race to tackle Covid-19. Its vaccine uses a chemically inactivated version of the virus to spark an immune response. The trial was halted due to a severe “adverse reaction.”
Biden’s Coronavirus Task Force
President-elect Biden announced his coronavirus task force. A number of preeminent scientists and public health people are on it. These include Michael Osterholm, Rick Bright, Zeke Emanuel, Luciana Borio, Celine Gounder, Dr. Robert Rodriquez, Eric Goosby, Loyce Pace, Dr. Julie Morita and Atul Gawande.
New U.S. Coronavirus Daily Cases Remain Above 100,000
The U.S. reported more than 100,000 cases for the sixth day running on Monday. About 789,000 people have tested positive over the past seven days, a record. The number of hospitalizations is within striking distance of its April peak. The number of people in hospitals being treated for Covid-19 rose to 59,274. The record was 59,940 hospitalizations on April 15.
The Coronavirus Numbers
The United States has surpassed the level of 10 million virus cases. Here are the numbers from Tuesday at 8 a.m. ET from Johns Hopkins University:
- 50,913,451 Infected Worldwide
- 1,263,089 Deaths
- 10,110,552 Infected in the U.S.
- 238,251 Deaths in the U.S.
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What’s Next
The pandemic is still raging. But you would never know that by the stock market reaction yesterday.
It flirted with record highs (with the exception of Nasdaq). It was all thanks to the promising news regarding the Pfizer/BioNTech coronavirus vaccine.
But keep in mind what public-health researchers Yot Teerawattananon and Saudamini Dabak wrote in Nature yesterday: “Creating a safe and effective vaccine is akin to striking base camp on Everest — the grueling climb to procurement and delivery lies ahead.”
There was a clear signal of a major rotation from growth to value yesterday. The Nasdaq 100 fell over 2%, while the Russell 2000 climbed more than 4%.
It remains to be seen if this trade has legs. I personally have my doubts.
But if it does, keep this in mind . . .
The Big Five technology companies make up about a quarter of the S&P 500. A rotation out of these names may act as a headwind. That means it will not be a straight line up for the indices.
It will be messy as portfolios rebalance. But with the Fed still supportive, the overall landscape for stock markets is still favorable.
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Yours in Health & Wealth,
Tony Daltorio