Over the weekend, the Food and Drug Administration said that Dr. Peter Marks resigned. Marks was the top vaccine regulator. He led regulatory efforts for the Covid vaccine during the pandemic. Operation Warp Speed was his legacy.
The resignation further reaffirms that drug stocks, especially those in the vaccine market, are not attractive investments. With Covid, demand for the vaccine waned over the years. The virus mutated to a less dangerous strain.
Investors should be wary of holding Pfizer (PFE), which developed an mRNA-based vaccine with BioNTech (BNTX). Moderna (MRNA) struggled to broaden its vaccine pipeline to offset the steep drop in Covid vaccine sales. Novavax (NVAX) risks falling by more. The stock attracted a 25.62% short float. Bears are betting that Novavax’s prospects will worsen.
Opportunity
Investors may consider Pfizer as an opportunity. The company developed an antiviral, Paxlovid, that treats adults for mild-to-moderate Covid 19.
Ahead of the resignation news, big pharma stocks traded lower. Companies that are not primarily in the vaccine market include Regeneron (REGN). Shares of Lilly & Co. (LLY) and Novo Nordisk (NVO), which make obesity drugs, have yet to bounce back.
Investors who want a diverse portfolio may consider Proctor & Gamble (PG) and Johnson & Johnson (JNJ).