an end to lockdown? · 2020. 11. 24. · should come with “attractive profit margins” as...

MoneyWeekVaccine Report: November 2020

An end to lockdown?What the Covid-19 vaccines mean for markets

MW_Vaccine Report_Nov_2020.indd 1 24/11/2020 13:56

“For consumers,

business and

markets, the vaccine is

an absolute game

changer”

After Covid – the roaring 2020sMerryn Somerset Webb

Editor-in-Chief


Welcome to this MoneyWeek special report, covering the impact that the promises of a vaccine – and of the world beyond Covid-19 and lockdowns that it paves the way for – have had on markets. We’ve selected some of the best bits of our recent coverage on the vaccine(s) and what it means for your portfolio.

Directly below is a column from November 13, in which our editor-in-chief Merryn Somerset Webb looked at the possibility that we’re heading for our very own “Roaring Twenties”. On the following page, we have a report on the impact the vaccine news has so far had on markets, and neglected value stocks in particular.

On page 4, our briefing looks at prospects for the first vaccine to be announced, and an analysis of how it works. Then finally, on pages 5 to 7, we’ve reprinted a feature from April 2020 in which my colleague Matthew Partridge suggested that readers invest in, among other companies, vaccine breakthrough stock Moderna.

We hope you enjoy this sample and that it encourages you to subscribe to the magazine – you can get your first six issues free right now by visiting http://subscription.moneyweek.co.uk/.

John Stepek Executive editor

After Covid – the roaring 2020s

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If you listened to our interview with investor and entrepreneur Jim Mellon in our November 6 issue (see moneyweek.com/videos) – or read the summary in the magazine – then went out to act on the specific advice he gave on Friday afternoon, I suspect you have had a pretty good week. Jim told us that a vaccine was closer than most people thought; that we should remember that the pandemic that broke out at the end of World War I was fast followed by the Roaring Twenties; and that we should hoover up the kind of companies that would provide the goods and services people would really want post pandemic. He was, he said, buying IAG (parent of British Airways); Marston’s; and (as a play on cheap UK) Lloyds. On Monday (November 9), we learnt an effective vaccine really is on the way. IAG rose 25%, Marston’s 23% and Lloyds 10%. Nice.

At the same time the stocks geared to working from home and lockdown in general mostly fell: Zoom was down 17% (albeit in the context of a 500% rise this year alone) and Peloton (producer of high tech indoor bikes some of you will know more about than I ever want to) fell 25%. There are vaccine naysayers aplenty out there. Both Boris Johnson and Nicola Sturgeon have been quick to say that the news doesn’t necessarily provide a fast route to the return of our freedom (and by extension the extreme powers they have given themselves over our lifestyles). But it certainly should: if anything, too many people are spending too much time worrying about logistics and too little noting the extraordinary scientific achievement this represents (and suggests is possible in the future).

If it is rolled out from December and the vulnerable (the old and the unwell) are vaccinated in a matter of months there is no obvious reason for any restrictions to remain at all by the early spring at the latest – given that the mortality rate for anyone outside the vulnerable groups is absolutely minute (the US CDC puts it at 0.5% for 50- to 69-year-olds). For consumers, businesses and stockmarkets that is an absolute game changer. Why? Because it means that instead of discounting an endless virus and politically driven stop-start future, we can start to imagine a straight-line recovery. You

could then expect a huge surge in demand for consumer services from populations that are cash rich (most people have saved money during the pandemic); fed up; and ready to spend. Add in the operational changes and productivity gains (cost cutting and digitalisation) forced by the pandemic (or in some cases given cover by the pandemic) and you should see some fairly stunning earnings momentum start to get going. Time perhaps to load up on the cheap UK stocks geared to a rather-better-than-expected cyclical recovery.

There are nasty risks of course (the debt overhang and rising unemployment being the obvious ones). But there is a reason the market has performed as it has this week: if things go even reasonably well from here we will soon be able to reclaim the bits we liked of our old normal (pubs, planes and parties) while reserving the right to dump some of bits we never really liked (commuting every single day and not having the faintest idea who our neighbours are). Roaring Twenties? Maybe.

First published November 13 2020

We can all get back to the pub before too long

Merryn Somerset [email protected]



Stocks surge to new record highs

“Two vaccines are better than one,” says Tara Lachapelle on Bloomberg. This week brought positive news about trials of Moderna’s vaccine for Covid-19. The update gave global markets a profitable start to the week, with America’s S&P 500 and the MSCI World Index both hitting record highs on Monday. The FTSE 100 rose to its highest level since June and has gained more than 13% so far this month.

A global bull marketThe rally took a break the next day but arguably markets should be even more upbeat, says Nils Pratley in The Guardian. The Moderna vaccine is easier to store and transport than the Pfizer jab that hit the headlines last week (see page 4). That could speed up the daunting logistical challenges of rollout. For “airlines, events and hospitality… it really matters whether a vaccination programme takes six months, a year or more”.

The bulls are out in force. Last week’s vaccine news triggered a $44.5bn flood of inflows into global stock funds, say Eric Platt and David Carnevali in the Financial Times. That is the biggest weekly inflow in “at least two decades”.

American bulls are not finding many bargains, though. On a cyclically adjusted price/earnings ratio (Cape) of 31.26 the US market is currently more expensive than it has been for 96% of the time since 1881, says Mark Hulbert for marketwatch.com.

No wonder, then, that new research from Kevin Lansing, an adviser at the Federal Reserve Bank of San Francisco, suggests that US stocks are poised to “barely outperform inflation” over the coming decade.

Value stocks will riseThe US stock rally is already showing “signs of exhaustion”, says Cormac Mullen on Bloomberg. The market’s heavy technology weighting helped the S&P

US stocks are pricier than they have been for 96%

of the time since 1881

500 outperform most other major bourses this year through early September. Yet since then the US has underperformed the MSCI World Ex-USA Index by 4%. The baton has now passed to markets in Europe and Japan, which boast a bigger stable of value stocks.

Since 2009 the MSCI USA Value Index has returned 246%, against 661% for the equivalent US growth index, says Jon Sindreu in The Wall Street Journal. Value seems due a catch-up, but history suggests such periods don’t last long. After their re-opening bounce, “old economy” shares are likely to face the same problems as before Covid-19: “ultra-low interest rates”, poor returns on equity and, for financial stocks, “strict banking regulation”.

Vaccine news could bring higher interest rates than the market expects, says the Financial Times. Eye-watering valuations are partly the result of years of easy central-bank money. Yet US ten-year Treasury bond yields have been ticking up of late, reflecting falling bond prices. This suggests greater confidence that growth will return and long-term interest rates will rise. “Lower-for-longer” interest rates may not stay low for quite so long after all.

First published: November 20

Alex Rankine Markets editor

A “stunning” second vaccine from ModernaBiotech firm Moderna has seen “tremendously exciting” preliminary results from trials of its Covid-19 vaccine, says Sarah Knapton in The Daily Telegraph. So far, only five people in the trial who received the jab have caught the virus, compared with 90 who received a placebo, implying that it is nearly-95% effective. That would make it “even more effective than either the Pfizer/BioNTech or Russian jab”.

The trials suggest it can even protect “the elderly and vulnerable”, with no one who has received the jab developing severe Covid-19 yet (compared with 11 from the placebo group).

Moderna’s success is “stunning”, says Robert Cyran on Breakingviews. Not only is

it highly effective, but side effects are “moderate”. More importantly, it can be stored in a conventional freezer for six months, and a fridge up to 30 days, making it much easier to distribute than Pfizer’s vaccine, which must be “kept far colder, complicating distribution”.

This is good news for emerging markets, who not only lack expensive storage facilities, but will also benefit from the fact that richer countries have ordered far more doses than they need.

This is “great news”, says Lex in the Financial Times. The data also brings “vindication for one of the sector’s most divisive companies”. After a “record-setting” listing in December 2018, Moderna’s

shares spent much of 2019 trading below its opening price. However, the coronavirus pandemic has put its work on messenger-RNA, which prompts the body to make its own medicine, “back into focus”. Indeed, there are hopes that the jab may represent “proof of concept” for other Moderna treatments, including a personalised cancer vaccine. So, it’s no surprise its shares have risen by 390% this year.

Moderna should now easily fund its other vaccines, says Charley Grant in The Wall Street Journal. Its $40bn valuation means it can raise money by selling shares and it also has $4bn in cash. Selling even 500 million doses of vaccine at $200 each would translate into $10bn, which

should come with “attractive profit margins” as Moderna’s decision not to seek a partner means that “it won’t have to share those profits”.

AstraZeneca should also be happy, says Nils Pratley in the Guardian. Moderna’s trial suggests its own jab, developed with Oxford University, will report similarly good news soon. What’s more, it stands to benefit from the fact that it “made a very good bet” when it invested in Moderna in 2013, when it was a “three-year-old biotech tiddler”. As a result, its 7.6% stake, which cost just $380m, is now worth $2.9bn – a “very decent” return. (By Matthew Partridge).

First published: November 20

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“This isn’t the end of the pandem-ic, but it may well be the beginning of the end”

What’s new?The German drug company BioNTech and its US partner, Pfizer, announced on Monday November 9 that their Covid-19 vaccine has been found to be 90% effective. The drug remains in phase-three clinical trials, and there are significant unknowns around the extent of its effectiveness, as well as challenges around scaling up and distribution (the vaccine has to be stored at around –75˚C). But there is hope. What happened in the trial?In a double-blind global trial involving 43,500 volunteers, who were either taking the trial vaccine or a control-group placebo, 94 people contracted Covid-19. The split between the two groups indicates that the vaccine – which is taken in two doses, three weeks apart – is more than 90% effective. We don’t know yet how many of those 94 had been given the vaccine and got Covid-19 anyway. It’s also not yet known how long vaccinated patients remain immune, or whether the vaccine stops transmission or just the development of the disease. What we do know is that it remains effective 28 days after the second of the doses is taken, and there are no reported safety concerns. So this is good news?Indeed, and not just because there appears to be an effective, safe vaccine, but because this particular virus is susceptible to control by a vaccine at all. Some viruses from the same family, and other pathogens such as HIV and malaria, have defied all efforts to develop a vaccine over many decades. The finding of 90% efficacy is also higher than most people had dared hope for (it’s twice as effective as flu vaccines, for example). BioNTech co-founder and boss Dr Ugur Sahin said he expected his vaccine’s immune response to last for “at least one year” and that the vaccine-induced antibodies were shown to block about 20 different mutations of Sars-Cov-2, the virus that causes Covid-19. All this makes it more likely that other effective vaccines will be developed. How do vaccines work?A conventional vaccine works by introducing the deactivated husk of a virus, or proteins from that virus, into the body. That dead virus triggers an immune response that prevents subsequent infection. It’s a very effective and proven approach, but it takes time. This new vaccine is different. It uses mRNA (messenger ribonucleic acid) technology that was originally developed as a cancer therapy. Genetic code wrapped in microscopic droplets of oily liquid is injected into the body. This code instructs cells to make viral proteins that prime the immune system. The idea is that the mRNA “tricks” cells into making fragments of the coronavirus, so that the body learns to spot what it looks like and produce antibodies. Is this technology new?Not completely. Such mRNA vaccines have been under development for years, aimed at tackling viruses including influenza, HIV, rabies and Zika. But the arrival of Covid-19 “turbocharged the process”, says Clive Cookson in the Financial Times. The crucial advantage of mRNA vaccines is that they are

Is this the big Covid-19 breakthrough?A vaccine that appears to be safe and effective is making its way through its final trials. There are

reasons to be cheerfully optimistic, says Simon Wilson (First published November 13 2020)

potentially faster to develop and easier to manufacture – making the technology ideal, if successful, to tackle a novel coronavirus pandemic. Their proponents also say they may be safer than conventional vaccines which may provoke an unwanted reaction from the immune system. BioNTech has led the charge, with backing from Pfizer. They say they will be able to produce a combined 1.35 billion doses by the end of next year. And there are three other mRNA candidate vaccines under development at Moderna in the US, CureVac in Germany and Imperial College London. What happens next?Phase-three trials of the Pfizer drug will continue, pending emergency regulatory approval, expected in the coming weeks. The UK has pre-ordered 40 million doses (enough for 20 million people), of which a possible ten million could be available before the end of December. Meanwhile, as more data arrive, scientists will be better placed to answer some of the crucial unknowns about how well this vaccine works. Does it work well in all age groups – and in particular the elderly? Does it prevent transmission as well as illness? If not, it may not get us to herd immunity. Does it prevent all illness or just mild illness? How long does immunity last? More broadly, there is a societal question of whether enough people will be willing to be vaccinated at all; in the UK around one in six say they are firmly opposed. What if the vaccine fails in the end?More are on the way. The UK has made deals to secure more than 350 million vaccine doses from five suppliers in addition to Pfizer. The AstraZeneca-Oxford University team’s vaccine, for example, uses a harmless chimpanzee virus to ferry genetic material from the coronavirus into human cells. It is expected to announce the results of its trials in coming weeks – and crucially its vaccine is already known to stimulate a good immune response in the elderly. Janssen (owned by Johnson & Johnson) is using a similar technique. GSK/Sanofi Pasteur, Novovax and Valneva are the other three potential suppliers with vaccines currently in clinical trials.

But the hype for this vaccine is justified?More than that, it might even be rather too cautious. Stephen Innes of brokers Axi thinks the markets are putting too much emphasis on the logistical challenges and too little on the fact that this could be a “real game-changer”. Given that we have in months leapt over the hurdles that usually keep a vaccine from market for a decade, the other challenges “will be a snap in comparison”. Brace yourself for “the mother of all economic and reflationary rebounds… once we have made it through what will still be a harsh winter”. This is definitely not the end of the pandemic, but it may well mark the beginning of the end.

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In 1796, Edward Jenner demonstrated that injecting people with pus from cowpox sufferers could stop them getting smallpox. Ever since then, vaccines have played a crucial role in public health. They work by training the immune system to recognise and fight viruses or bacteria, a process that begins when an inactivated form of a virus (one that has been rendered harmless) is given to a patient.

Despite their importance, however, they have typically been considered a backwater by drug companies, who have left them to governments, universities and charities to develop. This is time-consuming and expensive; even successful vaccines have made only a limited amount of money for the firms that created them.

But this is starting to change. The coronavirus crisis has sparked a massive hunt for a vaccine. According to the World Health Organisation, there are now five separate potential vaccines undergoing clinical trials, with groups in China and Oxford at the head of the pack. Another 71 are in pre-clinical evaluation.

Furthermore, it appears that recent blockbuster vaccines are prompting the big companies that dominate vaccine development to rethink their overall approach. Changes in the way vaccines are developed, moreover, are opening up the market to a wider range of companies, especially in the biotechnology sector. All this means that vaccines are becoming an increasingly appealing sub-sector of the pharmaceuticals market for long-term investors.

A structural growth marketWhile vaccines still account for a fraction of total healthcare spending, the market has grown sixfold to $35bn in the past two decades, says Ketan Patel of EdenTree Investment Management. This has been driven primarily by a “growing global population that can now be screened for illnesses that were once mass killers”. The governments of developing countries recognise that when it comes to saving lives by preventing diseases, vaccination programmes can be as important as access to clean drinking water.

Research by Johns Hopkins University estimates that “every dollar spent can yield a societal return of $44 in mid- and lower-income countries”, says Alex Hunter, global equity analyst at Sarasin & Partners. Even in a rich country vaccinations can save many lives. The US Centres for Disease Control and Prevention estimates that the US Vaccinations For Children (VFC) programme between 1994 and 2013 “saved 732,000 lives and benefited society by around $1.3trn”.

The vaccine market is likely to keep growing in the long term: one in four deaths worldwide are caused by infectious diseases. Hunter points out that more than 80 new potentially harmful viruses have been discovered since 1980 (including Zika, Nipah and Mers), but only 4% of them have a commercially available vaccine.

While emerging markets are giving the vaccine industry new impetus, developed countries are also starting to spend more thanks to “some very large products for a few specific diseases”, says Lydia

Cash injection: join the hunt for a coronavirus vaccine

“Vaccines can also be used to treat diseases, not just to prevent them”

Covid-19 has renewed interest in vaccines. But the appeal of this rapidly growing sub-sector of the pharma market should endure far beyond the pandemic. Matthew Partridge explains (First published 24 April 2020)

Haueter, senior investment manager in Pictet Asset Management’s Health Fund. These include Gardasil, which prevents the human papillomavirus (HPV) linked to cervical cancer. Thanks to routine mass-immunisation programmes, Merck received $3.2bn in revenue from Gardasil in 2018 alone.

Such high-profile successes have convinced the big drug companies that “vaccines can be economically viable”, says Haueter. As a result, they are starting to seek vaccines for hitherto neglected conditions. The next blockbuster vaccine could come from finding a way to prevent respiratory syncytial virus (RSV), which can cause serious problems in the very young and very old. It hospitalises up to 125,000 children under two every year in the United States alone. While no RSV vaccine has been approved yet, several possibilities are undergoing clinical trials.

From Big Pharma to small biotechDespite the success of individual vaccines, the big drug companies will always be more interested in the “more lucrative markets” such as cardiovascular diseases, says business historian Professor Louis Galambos of Johns Hopkins University. But there are still plenty of opportunities for investors.

Advances in molecular genetics have transformed the structure of the industry. The upshot is that smaller biotechnology firms are playing a growing role in the development of new vaccines. That boosts their profits and makes them attractive acquisition targets for bigger firms.

Anthony Ginsberg, founder and managing director of GinsGlobal Index Funds, believes that most of the really interesting vaccines in development are “now coming from Silicon Valley, not the laboratories of the

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A US vaccination programme saved 732,000 lives between 1994 and 2013



big giants”. He predicts that a new development model is starting to emerge that involves biotech firms doing much of the basic research and development before joining forces with a large company to help them bring the products that they have developed to market.

More bang for your buckThe rise of smaller biotech firms in vaccine development not only widens the range of investment opportunities, but it also makes it much easier for investors to bet on the growth of the sub-sector. This is because each successful vaccine will have a much bigger impact on the bottom line of a small biotech than on the profits of a large pharmaceutical conglomerate. Examples of biotech companies that are starting to challenge the big players in vaccines include Gilead Sciences, Regeneron Pharmaceuticals and Moderna. Moderna made headlines when it began human trials of a coronavirus vaccine in March, even before many governments had declared public emergencies.

Ginsberg points out that the biotechnology sector’s involvement with vaccines isn’t limited to those firms that are directly developing them. Most vaccines now involve the use of technology to sequence, or genetically “map”, the virus. So firms producing equipment and technology that speeds up this sequencing, as well as gene-editing firms, also stand to benefit. Change has been rapid: we “can now sequence genes around four times faster than was possible only a few years ago”.

Cutting red tapeThe profitability of vaccines should also be enhanced by recent moves to reduce the red tape associated with vaccine development. Up until now even the most promising vaccines have had to undergo trials that in some cases can last nearly a decade and involve large numbers of people, says Geoffrey Hsu, general partner of OrbiMed and manager of the Biotech Growth Trust. Of course vaccines require rigorous testing to ascertain that they actually work and don’t have nasty side-effects.

Still, regulators are now starting to realise that overly stringent rules can be counterproductive, not only during serious viral outbreaks, when time is of the essence, but also in the case of therapeutic vaccines “where the patient already has a serious disease”. In both these instances, government bodies are increasingly accepting that the burden of disease “is high enough that a more expedited approach is possible”. Indeed, the ongoing crisis has prompted the normally cautious US Food and Drug Administration to accelerate the vaccine-testing process, while UK regulators have allowed a team in Oxford developing a coronavirus vaccine to hold animal trials in parallel with early-stage human tests.

Ginsberg thinks that the crisis will prove to be a “game changer” in that people, even within government, are realising that many of the rules that have existed for years have little impact on safety. As a result, he thinks that people will realise that it will be “too risky” to move back to the regulatory status quo once things settle down, which will have a positive impact on innovation and reduce the time required to produce all types of vaccines.

Plant-based vaccinesAnother key change in the vaccine industry is the rise of plant-based vaccines. At present most vaccines “are still manufactured in chicken eggs”, says Haueter. (Finding a vaccine involves growing viruses in a cell, which they then take over; they can’t reproduce on their own.) This process takes time, which can be a

problem when seeking vaccines against viruses that are constantly mutating, such as the flu vaccine. In the case of flu, extended production times mean that scientists have to guess which strain will be dominant during the next season months in advance, which is why the effectiveness of the flu jab varies from year to year.

While there has been limited successes with approaches that manufacture vaccines from human cells or insects, the most promising alternative manufacturing technique is plant-based vaccines. Tobacco plants appear particularly well suited to this task. This is because the elements of the vaccine accumulate in tobacco plants much more quickly than with other methods, allowing vaccines to be produced in weeks, “compared with several months using conventional methods”, says David O’Reilly, director of scientific research at British American Tobacco (BAT).

In addition to reducing production times, plant-based vaccines could also lower the risk of delays related to contamination. This is because tobacco plants “can’t host pathogens, which cause human disease”, says O’Reilly. BAT has been working with the US Food and Drug Administration for a decade, via its biotech subsidiary Kentucky BioProcessing (KPB), and in 2011 produced ten million seasonal flu vaccine doses in one month. In 2014/2015 KBP used tobacco plants to produce the only source of the Ebola treatment ZMapp, which was used effectively by US key personnel during the outbreak in west Africa. A coronavirus vaccine that it has produced is undergoing pre-clinical trials

A universal flu vaccine?More rapid production of vaccines, especially those that are seasonal, is an important breakthrough, but there has also been some encouraging progress in the development of a universal flu vaccine. By protecting against all strains of influenza, a universal jab could eliminate the need to guess which flu strain will be dominant and prevent the death of many of the estimated 650,000 people who die each year from seasonal influenza. Sudip Saha of research group Future Market Insights notes that several organisations have progressed to the first stage of clinical trials, which suggests that there’s a good chance that a universal flu jab could be in the market “in the next five to six years”.

Pictet’s Lydia Haueter is a little more sceptical, suggesting that the “cat and mouse” game with the rapidly mutating flu virus will continue for some time. Still, she notes that changes in the way that flu vaccines target the virus could make them less vulnerable to being wrong-footed by sudden shifts. For example, instead of going for the exposed parts on the surface of the virus, researchers are trying to go for the stems of those proteins that are “a bit more tucked away and mutate less”, although it remains unclear whether such a vaccine could produce a sufficient immune system response to enable the body to ward off the disease.

Haueter also thinks that so-called mRNA vaccines could help improve the efficiency of flu jabs. Instead of injecting a deactivated version of the virus into a patient’s body in the hope of stimulating an immune system reaction, they get the muscle cells to produce a mini-vaccine themselves, creating proteins that stimulate the immune system. While no flu vaccines based around this technique have yet been approved, there are signs that mRNA vaccines can work for other viruses.

Combatting cancerAt present virtually all vaccines are used to prevent disease. However, recently there has been a focus on using vaccines to treat existing diseases, says Saha. In the case of cancer, the idea is to use vaccines “to get the

“Infectious diseases still cause one in four deaths worldwide, so vaccines will remain a growth market”

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“Tobacco plants appear especially well-suited to producing vaccines”

patient’s immune systems to mount an attack against cancer cells”, a field known as immunotherapy. Drug companies are exploring several methods, including using vaccines made up of cancer cells. Another is to remove immune cells from the patient and then expose the extracted cells from the patient to the virus in order to create the vaccine.

Immunotherapy is a relatively new field, but as

Geoffrey Hsu points out there have already been some notable success, with the US FDA approving some vaccines. Prominent examples include Provenge, which was developed by Dendreon Pharmaceuticals for the treatment of advanced prostate cancer, and Imlygic, developed by Amgen to treat inoperable melanoma.

First published April 24 2020

The vaccine makers to consider (published Apr 24)Pfizer: (NYSE: PFE) is a drug giant that owns the rights to Prevnar, which it acquired when it bought Wyeth in 2009. Prevnar, which is used to protect infants, young children and adults against pneumonia, was the first “premium-priced” vaccine marketed by a drug company, says Geoffrey Hsu of the Biotech Growth Trust.

Prevnar has proved to be incredibly lucrative for Pfizer, generating nearly $6bn a year, just under 15% of Pfizer’s current sales. Pfizer is working on a third-generation version of Prevnar. Pfizer trades at 12 times 2021 earnings with a solid dividend yield of 4%.

The British pharmaceutical company GlaxoSmithKline (LSE: GSK)

has been producing vaccines since 1882. Last year it made around £7.2bn in revenue from vaccines, over 20% of its total revenue, selling 701 million doses of 30 vaccines for 21 diseases. A further 14 are in development.

One possible blockbuster drug is a respiratory syncytial virus (RSV) vaccine intended for pregnant women and young children that is currently undergoing phase-two trials (the penultimate stage of clinical testing, before a drug is submitted to regulators for approval). Despite increasing revenue by an average of around 8% a year between 2014 and 2019, GSK trades at a reasonable 2021 price-

earnings ratio (p/e) of 14, with a dividend yield of 4.8%.

The French pharmaceutical company Sanofi (Paris: SAN) is one of the other major producers of vaccines, thanks to its subsidiary Sanofi Pasteur, which accounts for 13% of the parent group’s revenue. Sanofi Pasteur produces vaccines for a wide range of conditions, including seasonal flu.

It has a full pipeline of potential vaccines, including ones for RSV and HIV. It also recently announced a partnership with GSK to produce a vaccine against coronavirus that aims to begin clinical trials in the second half of this year. Sanofi trades on a 2021 p/e ratio of 12.6 and

yields 3.8%. Those willing to take on more risk should look at biotechnology company Moderna (Nasdaq: MRNA). It focuses on vaccines that use mRNA, which essentially gets the body to produce its own vaccines against diseases.

While it isn’t making profits yet, it recently landed a $483m grant from the US Biomedical Advanced Research and Development Authority to help develop a coronavirus vaccine, which has been one of the first to undergo clinical trials. It has five other vaccines that are also undergoing testing, including a personalised cancer vaccine that it is developing in conjunction with US conglomerate Merck.

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an end to lockdown? · 2020. 11. 24. · should come with “attractive profit margins” as...

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