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Vaccine Stocks Fly On Booster Shot OK, But Their Run Could Be Short-Lived

Vaccine stocks Moderna (MRNA), BioNTech (BNTX) and Pfizer (PFE) popped Friday after the Food and Drug Administration authorized a third dose of their Covid shots for some immunocompromised people.




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Now, organ transplant recipients and those with similarly compromised immune systems can receive a third dose of either messenger RNA vaccine. The update comes ahead of a Centers for Disease Control and Prevention meeting to discuss recommendations for all immunocompromised people.

Acting FDA Commissioner Janet Woodcock acknowledged the country “has entered yet another wave” of the pandemic.

“After a thorough review of the available data, the FDA determined that this small, vulnerable group may benefit from a third dose of the Pfizer-BioNTech and Moderna vaccines,” Woodcock said in a written statement. “Today’s action allows doctors to boost immunity in certain immunocompromised individuals who need extra protection from Covid-19.”

In morning trading on the stock market today, all three vaccine stocks jumped. Moderna stock rose 2% near 399.20. BioNTech stock surged 3.7% near 387.80. Pfizer stock popped 1.6% near 48.

Vaccine Stocks Fly On Boosters

The FDA will now allow immunocompromised people to receive a third dose of either messenger RNA vaccine at least 28 days following their second shot. Currently, the Covid shot from vaccine stocks Pfizer and BioNTech is allowed in people ages 12 and older. Moderna can immunize people ages 18 and up.

Ahead of the FDA’s updated authorizations, SVB Leerink analyst Daina Graybosch boosted her price target on vaccine stock BioNTech to 293 from 159. But she retained her market perform rating.

“Despite the more certain outlook for booster revenue, we reiterate our market perform rating as we do not foresee the extended durability in the (Covid vaccine) revenue stream that could support upside to the current market valuation,” she said in a report to clients.

To that point, the three vaccine stocks have shown signs of climax-run behavior. A climax run occurs when a stock’s momentum is simply too good to be sustainable. This is a rare sell signal as a leading growth stock becomes overheated and approaches a top.

All three hit record highs on Tuesday. But the vaccine stocks have since pulled back. Still, this month alone, Moderna stock has risen close to 11%. BioNTech shares are up nearly 14%. Pfizer stock has climbed more than 10%.

Antibody-Based Treatments

The FDA also suggested immunocompromised Covid patients discuss treatment with antibody-based drugs. These drugs pump Covid-fighting antibodies into the body. So far, Regeneron Pharmaceuticals (REGN) and Eli Lilly (LLY) have antibody cocktails for this use. Regeneron and Lilly aren’t vaccine stocks, however.

In response, Regeneron stock jumped 1.7% near 618.20. According to MarketSmith.com, Regeneron shares are in a buy zone above a cup-with-handle entry at 595.58. Lilly stock is in a profit-taking zone above a cup-base buy point at 218.10.

Follow Allison Gatlin on Twitter at @IBD_AGatlin.

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