A Lot Can Happen In Three Days

Just a few days ago, Goldman Sachs issued a research report suggesting that at least one coronavirus vaccine will be approved by the end of the year. About 48 hours later, Goldman issued another report suggesting that the market is underpricing the possibility of a vaccine becoming available as early as this Fall. And then the CEO of Pfizer, Albert Bourla, boasted yesterday, “October is coming… In October, the truth will be revealed.”

There is a lot of static out there currently, but preventing the coronavirus will change everything. It’s now likely that there will be a steady procession of vaccine related news each week leading up to the actual FDA approval, and investment markets are pricing in the fact that we don’t need enough doses for everyone in 2020-- we just need enough for people to feel like the problem has a solution.

Bourla’s statement comes just two weeks after the U.S. Department of Health and Human Services and the Department of Defense announced a $1.95 billion agreement with Pfizer and its German biotech partner, BioNTech, to deliver 100 million doses of a Covid-19 vaccine by December. On Thursday, Bourla said Pfizer expects to submit a vaccine to the U.S Food and Drug Administration in October for possible approval.

I know a little about the drug development process, but I also know a little about people and the function of incentives. The range of potential economic outcomes is extremely broad-- and just plain dire without a vaccine by Q1— but I have come to expect a vaccine to be approved this Fall. I also expect that leading up to the election, probably throughout the entire month of October, we will see a parade of clinical data from Pfizer but also from other vaccine developers. And if the data set from any given pivotal trial is complete by October, well, you might even share my sneaking suspicion that our President will put extreme pressure on the Agency at that time to approve it before the election.

The economy will explode if this happens. A rip-your-face-off rally. At this point, we have all heard experts tell us that it will be a long time before things get back to where they were; I submit that that is not how this works at all. A vaccine will allow kids to go back to school, workers to go back to work, patients to go to their doctors, and travelers to travel. It will change everything.

I talk with scientists in the pharma and biotech industries every day. A month ago, there were very few of them who thought a vaccine would be available until Q2 of 2021. A week ago, we were talking about Q1. Now, after three days of evolving commentary, we’re talking about before the election.

For disclosure information please visit: https://www.rgbarinvestmentgroup.com/terms-and-conditions