Late July. Pfizer (PFE) beats expectations for second quarter earnings and revenue generation while guiding the full year higher. Pfizer is a huge pharmaceutical company with many products. The firm's messenger RNA vaccine for COVID-19, co-developed with BioNTech (BNTX) , drove 41% of the firm's sales for the quarter. All anyone cared about was last week Moderna (MRNA) also does the double beat, almost entirely on sales of it's messenger RNA COVID-19 vaccine.
Monday Morning. German Biotech BioNTech reported earnings of E10.77 ($12.67) on revenue of E5.31 billion ($6.25 billion). Both numbers handily beat expectations. They also represent earnings growth of 12,633% on revenue growth of 1,339%. Between Pfizer and BioNTech, more than one billion doses of "BNT-162b2 have been distributed to more than 100 countries as of two weeks ago. BioNTech has supply contracts in place to provide roughly 2.2 billion additional doses that would be expected to generate around E15.9Bbillionin sales. That's up from 1.8 billion doses and E12.4 billion in sales over three months. As far as capacity is concerned, BioNTech is targeting full year 2021 manufacturing capacity of 3 billion doses and up to 4 billion doses for full year 2022.
BioNTech currently has 15 products in the firm's pipeline engaged in 18 ongoing trials. This includes trials for booster shots of the original jab, plus variant specific vaccines targeting both the Beta and Delta variants of the SARS-CoV-2 coronavirus. In addition, BioNTech is working with Pfizer on a vaccine program targeting influenza and is working on at least five vaccine candidates targeting purposes related to oncology (tumors/cancers).
Then late Friday, news broke from various sources, I found it at the Wall Street Journal and at Barron's. Apparently a very large study of 480K healthcare workers in South Africa found that the Johnson & Johnson (JNJ) jab, which at times has been maligned for one reason or another, provides an impressive 71% efficacy against hospitalization caused by the Delta variant.
The average number of daily new infections in the U.S. increased above 110K on Sunday for the first time since February. Hospitalizations are up 90% over two weeks, Deaths are up 92% over two weeks. The data is unclear, but it may look like Delta does not for the most part, spare children and younger adults the way past variants had.
On Sunday, at NBC and at ABC, Dr. Anthony Fauci sounded hopeful that the FDA would grant the PFE/BNTX vaccine full approval perhaps as soon as later this month. That application was submitted in May. Moderna (MRNA) submitted their application for full approval on June 1, and would probably not be far behind. JNJ has not yet submitted that application, but intends to.
Fauci does not expect to see a federal lockdown as was seen early in the pandemic as there is no way to quickly vaccinate the planet, and the vaccine will mutate somewhere. That said, he certainly seemed hopeful that once full approval is authorized, it becomes much easier for organizations, enterprises, universities, and even municipalities to mandate for those wanting to, or needing to participate in events, or even in employment. Fauci is "strongly in favor" of speeding booster shots to suppress immune systems ahead of the general population. As the son of a couple of older folks, one with serious health issues... I couldn't agree more.
I had mistakenly traded out of a wildly profitably long position in Moderna. That position only became more profitable. I have also been out of JNJ for a bit. Pfizer, I have stayed long since the start of the pandemic and is only now proving itself a worthy member of my portfolio. The fact is that demand for these vaccines is going nowhere. COVID, if ever tamed, will be something that human beings in my unprofessional opinion, will forever be forced to remain vigilant against. I think the messenger RNA vaccines are probably the best investments as they are the most easily adjustable, and quickest to manufacture. Versatility will remain key, especially should something (Lambda?) evolve that renders the vaccines in their current iteration useless.
- Long PFE equity with a $50 price target.
- Short PFE (covered) calls in order to raise revenue.
- Short numerous MRNA puts at lower strikes over the next two months in an attempt to get paid to expose myself to equity risk at a discount.