Vaccine Stocks Already Got Their Booster

How long will the world need continuing Covid-19 vaccination campaigns? The answer is unclear. Meanwhile, enthusiastic vaccine stock investors aren’t leaving themselves much wiggle room.

Pfizer and its partner BioNTech said Thursday that they will seek emergency authorization from U.S. regulators to distribute a booster shot of their vaccine. The companies also said they are developing an updated vaccine to combat against the fast-spreading Delta variant and will begin clinical trials next month. BioNTech shares rose on Friday morning, while shares of top vaccine developer Moderna fell slightly.

That is good news for shareholders on its face—a need for more vaccines translates into additional revenue, after all. Observers shouldn’t be surprised if Moderna makes a similar announcement about booster shots soon. For investors, though, the picture is far murkier.

For their part, U.S. health regulators sounded a cautious tone. They said they are working “to consider whether or when a booster might be necessary” in response. For instance, Covid-19 hospitalizations are rising in areas of the U.S. with low vaccination rates, but nearly all hospitalizations have occurred in unvaccinated patients.

While it is reassuring that drugmakers are prepared should today’s public-health situation worsen, the booster dilemma raises serious questions about the bull market in vaccine stocks. BioNTech and Moderna boast a combined market value of about $140 billion, on par with the value of Amgen , a diversified drugmaker that expects to book roughly $26 billion in sales this year.

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