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Cheap For a Reason: Avoid Moderna and Pfizer

Biotech investors who bet that Covid-related product sales would increase need to change their minds. Pfizer (PFE) continued its year-long downtrend. It touched a fresh 52-week low on Aug. 4 at $34.66. Moderna (MRNA) did not fare well either. Short interest was 4.3% on MRNA stock.

Moderna defied bears by issuing a higher sales outlook for its blockbuster Covid shot. In Q2/2023, sales of the vaccine plunged by 94% Y/Y to $344 million. Last year, it posted $4.7B in revenue. The prevailing Covid variant is not as lethal as the original strain. Furthermore, Moderna’s vaccine only offers protection for a few months.

Moderna expects Covid vaccine sales of $6 billion to $8 billion this year.

Pfizer posted a 54% drop in revenue in Q2/2023. The firm added $8.0 billion in revenue for its antiviral, Paxlovid. Without that and Comirnaty, the Covid vaccine, revenue grew by 5% Y/Y. The firm’s topline revenue benefited from product acquisitions. This includes Oxbryta and Nurtec ODT/Vydura.

Pfizer has potential. Besides its vaccine segment, it has immunotherapy and chronic disease products in the pipeline.

Your Takeaway

Companies associated with the pandemic will struggle on the stock market. Investors seek drug companies that have better revenue visibility. Markets are anticipating that Covid-related product sales will continue to fall in the coming quarters.

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