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Published On: Tue, Apr 13th, 2021

The Race For a Vaccine has Also Helped Hospital Shares

Its been one year since a mystery disease emerged in China which eventually was labeled a coronavirus, named Covid-19. The spread of the virus which made its way around the globe sparked a race for a vaccine that is coming into its final stages. 

The race for a vaccine is helping to buoy drugmakers as well as hospital stocks. While Pfizer, Moderna, and Johnson and Johnson attempt to get the approval of their vaccine drugs in both the United States and Europe, Hospitals are raking in dollars, as hospitalizations surge. Investors who have been focused on trading stocks of pharmaceuticals have also turned their attention to hospital shares. 

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photo/ Arek Socha

Drugmakers Look for Approval

Pfizer and its vaccine partner BioNTech along with competitor Moderna have both applied for approval of their vaccines in the European Union. This follows requests by both companies for approval at the US Food and Drug Administration. The applications to the EU’s chief medicine regulator is expected to see a turnaround by the end of December. 

The European Medicines Agency reports that doctors will work through the Christmas season to review the data from both the Pfizer and Moderna trials to see if there is enough proof of the two vaccines’ safety and efficacy. If these vaccines cut the mustard, they could be marketed as safe as soon as this month. The EMA is set to make a judgment on the BioNTech vaccine first, by December 29 at the latest, giving that candidate a two-week edge in the vaccine race over Moderna’s candidate. The agency will then decide whether to authorize the Moderna vaccine by January 12, 2021. 

The Vaccine Cannot Come Soon Enough

The approval of the vaccine cannot come soon enough as coronavirus hospitalizations have soared to an all-time-highs, in the US and are straining the health-care system in many parts of the United States. Despite the lack of beds in many states across the US, hospitals seem more prepared than they were in March and April with the virus hammered New York. Shares of major US hospital systems finished November with their best performances in months, including Tenet Healthcare Corp and HCA Healthcare Inc. both jumping at least 21%. That is far better than the S&P 500’s 11% monthly gain.

Despite the concern that the spread of the virus could overrun the hospital systems in the US in December, many investors believe that certain companies have figured out how to manage the load and remain profitable. Additionally, the most recent comments from some of the conservative judges at the Supreme Court, shows that the Affordable Care Act will likely remain intact. 

Who Will Get the Vaccine First

In the US, and an advisory group from the Center for Disease Control will vote on who will receive the vaccine first. Priorities include Healthcare personnel which includes 21 million people. 53-million people are over 65. There are approximately 3-million people in the United States living in nursing homes, and nearly 100-million people that are considered high-risk adults. Most believe that the top of the priority list is the essential healthcare workers and the people that are living in nursing homes. This would incorporate approximately 24-million people. There just might be enough vaccines available for those people in December. A smooth transition of the delivery of the vaccine will be key toward getting back to normal and helping to buoy the shares in the pharma space.

Author: JR

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