“A vaccine developed by Pfizer Inc. and partner BioNTech SE proved better than expected at protecting people from Covid-19 in a pivotal study, a milestone in the hunt for shots that can stop the global pandemic,” WSJ reports.
The Backstory: Pfizer partnered with BioNTech to develop an mRNA vaccine, a new and unproven technology that “prompts cells to make a synthetic version of the spike protein that juts from the surface of the new coronavirus [and] triggers the immune system to defend against the virus.
- Pfizer-BioNtech began late-stage vaccine trials in August, which has enrolled almost 44,000 subjects in the U.S. and other countries to date. The companies said no serious safety issues have arisen so far in the study.
The Findings: The vaccine proved more than 90% effective among the first 94 subjects in the study who contracted Covid-19 and developed at least one symptom. Pfizer-BioNTech still needs to conduct further research, but it’s a massive step toward a widely approved vaccine.
- The FDA was shooting for at least 50% efficacy on a vaccine candidate, which Pfizer-BioNTech’s candidate blew away.
Did Pfizer and BioNTech just win the vaccine race? Not quite yet, but the news definitely puts Pfizer-BioNTech’s vaccine in pole position against late-stage candidates from Moderna, Johnson & Johnson and AstraZeneca.
Next Steps: Pfizer said it “remains on track to collect at least two months of safety data during the third week of November and could file for an emergency authorization shortly thereafter.”
- Based on that timeline, WSJ projects the vaccine could go into distribution within the next few months. U.S. health regulators have “indicated” that they will take some time to conduct this review.
- For final analysis, 164 subjects need to become infected and develop at least one symptom.
This is huge news. The fact that we could have a 90% effective vaccine ready for distribution by January 2021 means we could start recovering the in-person economy over 12 months following. If Pfizer continues to gain green lights, we should be hyper-focused on valuation in relation to 2022 earnings when looking at stocks that rely on in-person volumes.
In order of speed to recovery, I believe the recovery will cascade like this:
- Local and commuting travel
- Domestic leisure travel
- Office occupancy
- Domestic business travel
- International leisure and business travel
This means that I generally expect domestic automobile, hotel, and airline traffic to recover before office occupancy, which will come before domestic business travel, which will come back before international travel. This is the framework I am currently using to think about return-from-home recovery stocks.