Here’s how Pfizer, Moderna and Gilead play with vaccines on the stock market and more
The coronavirus pandemic has shown that it is not necessary to test the effectiveness of vaccines to increase the value on the stock exchange. What El Pais writes
Several companies in the pharmaceutical sector, writes El Pais , have seen strong increases after communicating their progress in research on coronavirus vaccines, without publishing all the required data. The sale of shares held by Pfizer and Moderna executives feeds doubts.
The pandemic has shown that it is not necessary to test the effectiveness of a vaccine to increase the contribution of the main actors involved by tens of millions of euros. The most recent example is Pfizer and its announcement that its Covid vaccine is "over 90% effective". On the same day, the CEO of the American multinational Albert Bourla pocketed nearly five million euros by selling the shares in the company he owned. In May, several Moderna executives, including Spain's Juan Andrés, entered into similar deals worth over € 75 million, while the company was growing strongly on the stock exchange. There is still no certainty that these vaccinations will be effective.
Just a week ago, at noon on Monday, the stock markets celebrated Pfizer's announcement with jubilation: Ibex marked the biggest increase in a decade, markets uncorked sparkling wine on both sides of the Atlantic and Pfizer itself scored 8%. The company is already closing millionaire deals to sell its vaccine to several countries, but the truth is that the only public proof of its effectiveness is a press release from the company itself that doesn't answer fundamental questions: Does the vaccine protect against the form. serious of Covid? How many people have been vaccinated? Will this injection be able to save the lives of the elderly, those most threatened by the new coronavirus?
The Modern American has also increased its capitalization since the beginning of the year after announcing good data on the coronavirus vaccine through press releases, months before the publication of the detailed scientific studies to support their claims. The same happened on Monday: the stock market rose after an encouraging announcement on the effectiveness of his project (94%), but also without a scientific endorsement beyond the company's press release. Only now will the European Medicines Agency begin to review the first results.
After a year and a half of flat performance on the stock market, since its debut on the stock market, this year it has so far multiplied its value by almost five. Everything, hot on its vaccine, is still experimental. In May, when the Cambridge, Massachusetts-based company announced positive preliminary Phase 1 results of its injection, it increased its value by 20% in just one day. Two months later, when the company announced that the vaccine was entering its final testing phase, the weekly increase was 50%, breaking a new all-time high. A circumstance that its president, its CEO and its technical and medical directors have exploited to get rid of a large part of its shares in millionaire sales.
To avoid accusations of insider trading, these trades must be planned in advance and avoid any connection with a new business. But cases like Bourla's at Pfizer arouse suspicion. There is reason to believe that this is not the case: A 2006 study analyzed 3,000 such transactions and showed that executives always sell just before a stock market crash or immediately after a rally. Another analysis by Harvard and Columbia universities, based on more than 40,000 such moves between 2004 and 2014, showed that executives make above-average profits on such deals.
"It is unacceptable that the senior executive of a company makes so much money on the same day that such a vague announcement is made, without us knowing the details of the vaccine's effectiveness," says Marcos López Hoyos, president of the Spanish Society of immunology. “Usually an ad like this requires a lot more efficacy data, this is unheard of. The worst part is that these operations fuel the No-Vax, because it seems that their development is just business and not science, when it is not, ”he adds. There are also many doubts from the financial world. “These movements send a contradictory and shocking message,” says Ana Gómez, analyst at Renta 4. “It's worrying,” adds Enrique Zamácola, director of shares at Link Securities.
Pfizer and Moderna management did not answer El País' question whether this type of operation, while totally legal, seems ethical to them. Both companies only replied that their share sales plans are closed months in advance and comply with the rules of regulators. Moderna adds that all of its executives have pledged not to sell any more shares in this way until trials of its vaccine are complete and the company submits an application for approval. Pfizer sources explain that the data released this week comes from the first interim analysis of the results by an independent committee and that the company plans to publish detailed test data in a scientific journal reviewed by independent experts.
Gilead (USA) also became one of the names of the year in the press and in the markets when its controversial remdesivir drug was announced. But in his case, his results look less positive on the stock market: after the blaze of the first half of 2020, his shares are now trading even below the January 1 level. Clinical studies show that this drug does not save the life of the infected: it only reduces the time spent in hospital for some patients. But that hasn't stopped the company from closing multimillion-dollar remdesivir deals, for example with the EU, where it hopes to place up to half a million doses at around € 2,000 per patient.
The deal was closed just days before the World Health Organization (WHO) announced that, according to its data, remdesivir does not save lives and does not affect the length of hospitalization. The company makes testing the body unreliable and is conducting new clinical trials to clarify the effects of its drug as it plans to increase production of the product, which was initially developed to treat Ebola without success.
Company sources say that "so far, the highest quality data published supports the use of remdesivir for Covid patients" and stress that such data "made this the first drug approved by more than 50 regulators in all. the world". In the case of the United States, this approval is final, but in many others, including Spain, the approval is temporary in emergency conditions. The European Medicines Authority is reviewing the data to consider a possible full authorization.
"The way the process is going, and I want to believe that in the attempt to be transparent, a lot is being handled and communicated too soon", evaluates Gómez, of Renta 4. "On the one hand, information is given to the market on condition that it has yet been reviewed or published in any scientific journal, and on the other hand, this coincides with the fact that the market is eager for news, ”he explains.
“Companies must avoid making missteps as much as possible: they can be pitted against each other by the loss of credibility. The risk of reputational damage is enormous: it takes years to build and can be ruined very quickly. " "In the past, says Zamácola, of Link Securities, we have seen many setbacks in well-known biotechnologies and not so much: if the advances communicated to the market on a drug end up not being a success, investors lose confidence." According to Evan Seigerman, a Credit Suisse analyst specializing in the pharmaceutical industry, “it is common for pharmaceutical companies to announce their progress in press releases and then share the study data at medical conferences or in trade journals. I don't think that acting in the normal course of business is fueling a bubble ”.
(Extract from the press review of Eprcomunicazione)
This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/economia/pfizer-moderna-giead-vaccini-borsa/ on Sat, 21 Nov 2020 18:22:32 +0000.