3 Vaccine Stocks to Buy as the FDA Cracks Down on New Variants

Stocks to buy

On Friday, the U.S. Federal Drug Administration (FDA) okayed the launch of updated vaccines as part of the 2024-2025 campaign against new Covid strains. 

Drug manufacturers have been waiting on approval from the agency, whose decision-making was complicated by the fact that the virus keeps mutating. FDA settled on targeting JN.1 — the variant responsible for most Covid cases of early this year. 

A vaccine targeting JN. 1 should offer broader protection against its offshoots KP.2, KP.3 and others that may pop up in the coming months.

Now that it’s a go, drug companies will ramp up production to roll out the vaccines by early September. 

For investors, the FDA’s action puts on the spotlight vaccine stocks that could see significant appreciation as the booster shots hit the market. Let’s examine three vaccine stocks that have a high chance to benefit from the action.

Pfizer (PFE)

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Pfizer’s (NYSE:PFE) first quarter report this year had mixed results. Though it topped earnings per share (EPS) and revenue analyst estimates, it reported a decline in other metrics, such as a 19% year-over-year (YOY) decline in revenues.

The drugmaker has struggled with declining revenues, especially in its Covid vertical, with worries about the pandemic decreasing. It hopes to bring its financials on an even keel with a new Covid vaccine in the pipeline. 

Further, Pfizer is slated to be one of the companies that will roll out a vaccine for the Covid variant JN. 1 and possibly the KP.2 variant if the FDA gives a nod to the latter. The rollout, plus turnaround strategies Pfizer is looking to employ, should bump up its value as a vaccine stock in the foreseeable future.

Thus, those strategies include cost-cutting measures that should save up to $4 billion by 2025 and its recent buyout of cancer manufacturer Seagen, which will boost its revenue in the coming years. 

Moderna (MRNA)

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Shares of Moderna (NASDAQ:MRNA) were up 36% from the beginning of May through June 7 at market close. The company is witnessing a more robust performance, at least when compared to Pfizer, which has added just about 5% in the same period.

And, the good times are likely to keep rolling for the Cambridge, Massachusetts-based therapeutics company, as it releases a shot to match the JN. 1 strain. If the KP.2 variant continues to persist, Moderna will also see a jump in revenue and share price. It has already tested a vaccine in readiness for FDA approval.

In addition, Moderna now controls 48% of the U.S. Covid19 market share, up from 37% in 2022. The expected recurring revenue from the Covid19 and its non-Covid19 vaccines has had a positive reception. Moderna is one of the best vaccine stocks to buy.

Novavax (NVAX)

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Novavax (NASDAQ:NVAX) will benefit from the FDA’s decision as it has already tested a vaccine for the JN. 1 strain in its lab. Thus, the vaccine maker is ready to hit the runway and produce a vaccine for this year’s fall booster campaign at scale. 

By doing so, Novavax will go toe-to-toe with Pfizer and Moderna in the Covid vaccine stock market this time. The latter two sprinted ahead in 2021 after securing funding earlier and because they used the relatively new mRNA technology, which was faster to develop compared to Novavax’s more traditional protein-based vaccine. 

Shares of Novavax shot up 24% in intraday trading on Wednesday on the FDA news. Even before the news, Novavax shares had seen a dramatically buoyed past month after the company signed on the dotted line a $1.2 billion co-sell agreement with the French drug manufacturer Sanofi. 

The deal will give Novavax plenty of breathing space — considering it had raised doubts about its ability to stay afloat only last year.

Hope Mutie is a writer who’s enthusiastic about finance and crypto. At InvestorPlace, she keeps her finger on the pulse of the stock and crypto markets to create insightful and info-rich content to help investors navigate the market with confidence.

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