3 vaccine stocks to buy as FDA pulls back on new variants

On Friday, the US Federal Drug Administration (FDA) has agreed to introduce updated vaccines as part of the 2024-2025 campaign against new strains of Covid.

Drugmakers were waiting for approval from the agency, whose decision is complicated by the fact that the virus is constantly mutating. The FDA decided to target JN.1, the variant responsible for most Covid-19 cases, earlier this year.

Vaccine directed against JN. 1 should provide broader protection against its offshoots KP.2, KP.3 and others that may appear in the coming months.

Now that this has been achieved, pharmaceutical companies will ramp up production to roll out vaccines in early September.

For investors, the FDA’s action shines a light on vaccine supplies, which could surge significantly as booster shots hit the market. Let’s look at three vaccine stocks that have a good chance of benefiting from the action.

Pfizer (PFE)

Pfizer (NYSE:PFE) report for the first quarter of this year brought mixed results. Although it was higher than earnings per share (EPS) and revenue analyst estimates, saw other metrics decline 19% year-over-year (YOY) decline in revenues.

The drugmaker is grappling with falling revenues, particularly in its Covid-related business, amid concerns about the pandemic abating. He hopes to balance his finances by preparing a new Covid vaccine.

Moreover, Pfizer is expected to be one of the companies that will introduce a vaccine against the Covid JN variant. 1 and possibly the KP.2 variant if the FDA turns its attention to the latter. The rollout and turnaround strategies Pfizer is looking to employ should increase its value as a vaccine stockpile in the near future.

These strategies therefore include cost-cutting measures that should save up to $4 billion by 2025, and the recent buyout of cancer maker Seagen, which will boost its revenues in the coming years.

Moderna (MRNA)

Shares Moderna (NASDAQ:MRNA) rose 36% from early May to June 7 at market close. The company is seeing better results, at least compared to Pfizer, which added only about 5% over the same period.

The good times will likely continue for a Cambridge, Massachusetts-based therapeutic company that will release a shot that rivals JN. 1 strain. If the KP.2 variant holds, Moderna will also see a jump in revenue and stock price. It has already tested a vaccine that is ready for FDA approval.

Additionally, Moderna now controls 48% of the US Covid19 market share, up from 37% in 2022. Expected solid revenues from Covid19 vaccines and its non-Covid19 vaccines have been met with positive reception. Moderna is one of the best vaccine stocks to buy.

Novavax (NVAX)

Novavax (NASDAQ:NVAX) will benefit from the FDA’s decision because it has already tested a vaccine for JN. 1 strain in his laboratory. Thus, the vaccine manufacturer is ready to go out and produce the vaccine on a large scale for this year’s fall booster campaign.

With this, Novavax will face Pfizer and Moderna in the Covid vaccine stock market this time. The latter two moved forward in 2021 after securing funding earlier and using relatively new mRNA technology that was faster to develop compared to Novavax’s more traditional protein vaccine.

Novavax shares rose 24% in intraday trading on Wednesday following the FDA news. Even before this news, Novavax’s stock had surged dramatically last month after the company signed a dotted-line $1.2 billion co-sales agreement with French drugmaker Sanofi.

The deal will give Novavax plenty of breathing room – considering it only last year raised questions about the company’s ability to stay afloat.