Vaccine Stocks Skid As Delta Variant Becomes More Prevalent US Covid Strain - Investor's Business Daily

Vaccine stocks Moderna (MRNA), BioNTech (BNTX) and Novavax (NVAX) skidded Wednesday as the highly contagious Delta variant became the most prevalent Covid strain in the U.S.

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The Delta variant, first identified in India, now accounts for close to 52% of Covid cases in the U.S., according to a July 3 estimate from the Centers for Disease Control and Prevention. The news comes amid continuing worries that variants will undo global vaccination efforts.

In this month's IBD/TIPP Poll, 67% of respondents were concerned that new Covid-19 strains would worsen the coronavirus pandemic in the U.S. That number comes as the U.S. campaign to vaccinate against Covid-19 has seemingly ground to a halt. Echoing previous months, more than a quarter of respondents say they aren't planning to get a Covid shot.

Shares of vaccine stocks stumbled Wednesday. Moderna stock toppled 4.9% to 221.90. BioNTech stock slipped 3.6% to 205.93. Novavax, which doesn't have an authorized vaccine, slumped 13.7% and ended the regular session at 185.78.

Vaccine Stocks Fall As Delta Rises

Health experts say the Delta variant is more contagious and may cause more severe symptoms than the original strain or other mutations. Delta now accounts for 51.7% of U.S. cases. It has overtaken Alpha, first found in the U.K., which is responsible for an estimated 28.7%.

Meanwhile, the variant first identified in South Africa — now known as Beta — accounts for a small fraction of U.S. cases, 0.2%. But the Gamma variant, first found in Brazil, is responsible for 8.9% of cases in the U.S., the CDC estimates.

The Delta variant is gaining significant speed in the U.S. Just two weeks ago, it accounted for a hair above 30% of U.S. cases, trailing the Alpha variant at 44.2%. In mid-April, the oldest data available show the Delta mutation was responsible for a tiny fraction of U.S. cases.

Companies Pivot To Mutations

Vaccine stocks are pivoting to tackle the Delta mutation.

Moderna pitted its vaccine against a handful of variants. Serum from eight vaccinated people generated neutralizing antibodies in response to Beta, Kappa, Delta, Eta and mutations first found in Uganda and Angola.

"As we seek to defeat the pandemic, it is imperative that we are proactive as the virus evolves," Moderna Chief Executive Stephane Bancel said in a written statement. "These new data are encouraging and reinforce our belief that the Moderna Covid-19 vaccine should remain protective against newly detected variants."

Vaccine stock Johnson & Johnson (JNJ), which has a one-shot vaccine authorized in the U.S., said its inoculation showed "strong, persistent activity against the rapidly spreading variant and other highly prevalent SARS-CoV-2 viral variants." SARS-CoV-2 is the name of the virus that causes Covid.

In the study, a single dose of the Johnson & Johnson shot was 85% protective against severe or critical disease caused by the Delta variant. It also protected against hospitalization and death. The news on July 1 sent the vaccine stock up close to 2% the following day.

U.S. Vaccination Campaign Slows

Still, the U.S. vaccination campaign appears to have halted, which could hurt vaccine stocks. As of July 6, 157.6 million people in the U.S. were fully vaccinated. That's less than half of the U.S. population — 47.5%.

Estimates vary, but health officials have said vaccination rates of 70%-80% would be ideal to reach herd immunity. Herd immunity is the point at which enough people are vaccinated that the nonimmunized population is protected.

In the July IBD/TIPP Poll, 27% of respondents said they wouldn't get a Covid shot soon, or ever. Another 8% said they were waiting for the vaccine to become available. In the previous two months, 26% of respondents said they wouldn't get a Covid jab. Still, vaccine stocks have climbed in 2021.

Follow Allison Gatlin on Twitter at @IBD_AGatlin.

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