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Covid vaccine makers’ shares seesaw after Biden administration says it will back patent waivers

A healthcare worker fills a syringe with Moderna COVID-19 vaccine. At the Giorgio Companies site in Blandon, PA where the CATE Mobile Vaccination Unit was onsite to administer Moderna COVID-19 Vaccines to workers Wednesday morning April 14, 2021.

Ben Hasty | MediaNews Group | Getty Images

Shares of Covid vaccine makers seesawed Thursday after the Biden administration said it would back a motion before the World Trade Organization to waive patent protections of the mRNA technology used to make the shots.

Pfizer fell Thursday by as much as 5% from Wednesday’s close while Moderna dipped by almost 12% before both stocks recovered most of those losses. The companies use the same mRNA technology to make their shots. Pfizer, which is making its Covid-19 vaccine with French pharmaceutical company BioNTech, closed down by about 1% for the day while Moderna lost about 1.4% for the day.

South Africa and India are pressing U.S. officials and the WTO to temporarily waive patent protections so developing countries can produce the life-saving vaccines until world leaders can get the pandemic under control. Human rights organizations like Doctors Without Borders, Oxfam and Amnesty International have all signed onto a letter supporting the proposal.

U.S. Trade Representative Katherine Tai wrote released a statement Wednesday evening backing the change.

“This is a global health crisis, and the extraordinary circumstances of the COVID-19 pandemic call for extraordinary measures,” she said. “The Administration believes strongly in intellectual property protections, but in service of ending this pandemic, supports the waiver of those protections for COVID-19 vaccines.”

Moderna CEO Stephane Bancel told investors on an earnings call Thursday he “did not lose a minute of sleep” over the news and said that trader concerns were misguided.

Biden made a campaign promise last year to “absolutely, positively” waive vaccine patents, which could take some time to implement.

Critics of the move say that developing countries don’t have the infrastructure available to manufacture the vaccines, but others disagree.

Johnson & Johnson and AstraZeneca both use an adenovirus, a common type of virus that typically causes mild cold symptoms, in making their Covid vaccines. Shares of both of those companies were little changed Thursday.

Waiving the patent protections could take months or even years. Analysts largely shrugged off the news.

“We believe any new manufacturing operation could take 6 to 9 months to scale, effectively limiting the impact of other producers. Thus, while we expect pressure on MRNA from the headlines, we do not see significant practical implications from this news,” analysts at Morgan Stanley said in a research note Thursday.

Other analysts at Bank of America note that “US support is not the same as approval where WTO decisions require consensus, and other members such as the EU, UK, Japan, and Switzerland currently oppose waiving IP.”

Angela Merkel, the Chancellor of Germany, joined those countries Thursday in opposing the waivers. European Commission President Ursula von der Leyen didn’t embrace the plan, saying in a speech she was “ready to discuss any proposals that address the crisis in an effective and pragmatic manner.”

“The limiting factor in vaccine manufacturing is production capacity and high quality standards, not patents,” a spokeswoman for Merkel said in a statement.

Analysts at Bank of America also cited “barriers to vaccine development including sourcing raw materials, developing manufacturing and technical know-how.”

Both Pfizer and Moderna already have plans in motion to produce billions of doses in the meantime, essentially leaving any competitors far behind in the manufacturing process.


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