What's going on?
Apparently Moderna never listened to Nancy as a kid: the American biotech’s shares got totally high on Wednesday after its encouraging coronavirus vaccine trial results were published late on Tuesday.
What does this mean?
Let’s start with a disclaimer: it’s still early days for Moderna’s potential vaccine. But even so, it’s said to have produced a “robust” immune response in all 45 human patients that took part in its early-stage trial (tweet this). More specifically, the vaccine produced antibodies that could potentially neutralize COVID-19 and give participants at least some protection from the virus. Another disclaimer: there are still several unknowns, including how long that protection might last.
Moderna previously announced plans to enrol 30,000 new participants to take part in late-stage vaccine trials later this month. And now – given the early excitement around its initial trials – investors, governments, and exhausted parents worldwide will be watching the results even more closely.
Why should I care?
For markets: Spoiled for choice.
Moderna’s stock initially rose almost 20% on Wednesday, suggesting investors were hopeful this vaccine will be “the one”. That’s despite all the unknowns of drug development and the stiff competition in the market: hundreds of potential vaccines are in development, after all. News even broke on Wednesday that the University of Oxford’s rival vaccine – set to be produced by AstraZeneca – might be even more effective than Moderna’s. Investors who aren’t brave enough to back a single winner might be inclined to put all the vaccine-developing companies into a single basket and buy that instead.
The bigger picture: A collective sigh of relief.
Even economists’ and companies’ most positive forecasts are heavily caveated with the looming risk of a coronavirus resurgence. But a vaccine could negate that risk and set the global stage for a much-hoped-for – yet increasingly unlikely – V-shaped recovery of both economies and company earnings alike. And that might be why stocks the world over got a nice boost from Moderna’s update.