Shares in AstraZeneca have dropped 8.1 percent in the last six months as the public loses confidence in the company’s COVID-19 vaccine.
We are now over a year into the COVID-19 pandemic and millions across the world are beginning to feel a little more at ease as countries ramp up their vaccination efforts. Those in the U.S. are familiar with the Pfizer-BioNTech, Moderna and Johnson & Johnson vaccines. On Monday, AstraZeneca released results of a large U.S. trial, claiming that the vaccine was shown to be safe and 79 percent effective in preventing symptomatic disease.
Meanwhile, regulators in Denmark, Germany and Norway identified reports of serious or fatal blood clots among young people who had been administered the AstraZeneca vaccine. Although the number of reported cases is small, regulators argue that it is statistically significant; Germany halted the distribution of AstraZeneca’s vaccine and most other countries soon followed suit. New Zealand decided to donate its supply to countries in need, opting for the Pfizer-BioNTech shot instead. South Africa sold its AstraZeneca doses. Confidence in the company’s vaccine is dropping and so is their stock price.
Angela Merkel, chancellor of Germany, instituted a lockdown that will not be lifted until at least April 18. Germany’s DAX, the blue-chip stock market index comprising the thirty largest actively traded companies on the Frankfurt Stock Exchange, was down 0.1 percent as of Tuesday. On top of that, “yields are falling as investors look to bonds for safety,” according to Al Root via Barron’s. The 10-year U.S. treasury yield dropped to 1.63 percent Tuesday.
Moreover, U.S.-listed shares of AstraZeneca dropped two percent in premarket trading; shares in London fell more than one percent. Overall, AstraZeneca shares have dropped 8.1 percent in the last six months, compared to the Zacks Large Cap Pharmaceuticals industry’s gain of 4.8 percent. Although confidence in AstraZeneca’s vaccine is low, some of the company’s other drugs could pick up the slack. Cancer drugs Lynparza, Tagrisso and Imfinzi, according to the Nasdaq analysts, “should keep driving revenues”.
In December 2020, analyst Jim Crumly wrote on The Motley Fool that AstraZeneca was “one of the most attractive buys in the industry at the moment.” A Morgan Stanley analyst predicted that AstraZeneca’s 2021 profit could increase by 30 percent because of their COVID-19 antibody medicine.
But just last week, the president of the European Commission, Ursula von der Leyen, stated that “AstraZeneca has unfortunately underproduced and underdelivered.” If that weren’t enough, on Tuesday, the National Institute of Allergy and Infectious Disease reported more concerns about AstraZeneca’s efficacy from its vaccine trial. More specifically, the Data and Safety Monitoring Board (DSMB) as an independent expert group, “wrote a rather harsh note to [AstraZeneca]… saying that in fact they felt that the data that was in the press release were somewhat outdated and might in fact be misleading a bit,” according to Dr. Anthony Fauci on Tuesday. Despite this, Fauci maintains that AstraZeneca has likely produced “a very good vaccine.”