Vaccine Makers Face Challenge in Sustaining Winning Streak

Covid-19 vaccine-makers’ shares have soared since the beginning of 2020. Moderna Inc. MRNA 3.05% is up about 850%, BioNTech SE has risen 510% and Novavax Inc. NVAX -2.08% is up nearly 3,620%.

Each of these companies has produced vaccines that have won regulatory authorization or are expected to win that backing. Some of the vaccine makers are racking up huge revenues. Their valuations assume more big gains, which depend on the next stages of the pandemic and whether the companies’ vaccine technology can be used to treat other diseases.

Michael Yee, an analyst at Jefferies Group, expects Covid-19 vaccines to produce $20 billion of sales for Moderna this year and between $10 billion and $30 billion next year, for example. In May, the Cambridge, Mass.-based company said its Covid-19 vaccine was effective in children aged 12 to 17 in a new study. The Moderna shot would be the second for use in adolescents after the Pfizer -BioNTech vaccine.

The big pharmaceutical companies that developed vaccines, such as Johnson & Johnson, Pfizer Inc. and AstraZeneca PLC, haven’t had the share-price gains like the smaller companies. Even successful vaccines won’t boost these companies’ huge revenues much. Some of the companies have also promised to limit profit during the pandemic, and AstraZeneca and Johnson & Johnson have struggled with production. Still the companies could benefit if long-term demand grows for their vaccines.

The high valuations for the smaller stocks are giving some analysts pause. The companies likely will have to continue selling huge numbers of these shots, or find new pathogens and illnesses for their technology to tackle, to drive their stock prices higher, some investors and analysts say. Moderna has a market value of more than $75 billion, for example. Its high stock price is why Mr. Yee has a hold rating on the stock, even though he is bullish on the company’s prospects.

Investors are debating the virus’s future. Though Covid-19 continues to inflict tremendous damage in India, Brazil and other parts of the world, vaccination rates are growing elsewhere and there is a chance SARS-CoV-2, the virus behind the pandemic, will eventually become a relatively minor nuisance.

It could crop up in spots, but the virus is unlikely to be capable of anything close to the levels of death and disease experienced over the past year, according to health experts. More drugs likely will be rolled out to help those with the disease, another reason to expect Covid-19 to become less of a pressing concern.

If Covid-19’s hold on society continues to loosen, what will happen to the expensive shares of the vaccine makers? The bull case is that booster and regular shots will still be popular for the foreseeable future.


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At the same time, companies such as BioNTech and Moderna are optimistic they will be able to use their messenger RNA technology to combat other diseases and illnesses. Novavax and others hope to introduce a vaccine that can protect against multiple coronaviruses, such as the ones that hit in the past two decades, severe acute respiratory syndrome, or SARS, and Middle East respiratory syndrome, or MERS. The shots could also work against the flu, Novavax investors say.

Mr. Yee notes that half the country gets a flu vaccine each year, so it is reasonable to expect people to also want regular coronavirus shots on an annual or regular basis.

Mr. Yee has high hopes for Moderna’s drugs targeting other respiratory-infectious diseases like respiratory syncytial virus, or RSV, and cytomegalovirus, or CMV, as well as other potential areas like cancers and inflammatory diseases. He is optimistic because the company has demonstrated with its Covid-19 vaccine that it can efficiently get its mRNA molecule into cells, resulting in beneficial protein production to trigger an immune response.

As more U.S. adults get their Covid-19 vaccines, a variety of side effects are emerging. WSJ’s Daniela Hernandez speaks with an infectious disease specialist on what is common, what isn’t and when to seek medical attention. Photo: Associated Press

Some of these companies have spent years working on vaccines and medicines without much luck, so to expect another wave of breakthrough medicines could be asking a lot. Meanwhile, rival companies are developing next-generation vaccines and treatments.

Some pioneers in the field argue that Covid-19 was a relatively easy pathogen to tackle, at least in hindsight. Very little antigen was needed to stir the immune system, it turned out.

Drugmakers may find future vaccines and medicines more challenging.

“To move beyond vaccines and unlock the full potential of mRNA as a drug, a new generation of technology will likely be required,” said Kenneth Chien, a co-founder of Moderna and a professor at Karolinska Institute in Sweden, who said companies need to develop the ability for repeated dosings that can target specific tissues.

Soaring Shares

More coverage of Covid-19 vaccine makers and their stocks, selected by WSJ editors

Write to Gregory Zuckerman at

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