The U.S. election will be big news in November, but news on coronavirus vaccines will probably “move the needle” more for markets. We think there may be some market-moving news coming our way in November. The White House? Sure, the U.S. election is going to be important for investors.

But let’s remember that the primary market-mover this year has not been politics, trade or taxes, but rather the coronavirus and our efforts to contain and defeat it—and the next 10 weeks could deliver some game-changing developments in that story.

Vaccine News

That all puts the spotlight on vaccine news, which we think is much brighter.

First up is likely to be news on the mRNA-based vaccine from Pfizer and BioNTech, where pivotal efficacy and safety data could be available as early as this week. The U.S. Food and Drug Administration has mandated at least 50% efficacy for regulatory approval and Terri thinks Pfizer may be shooting for a more solid 65% or greater. That could delay the report until mid-November, but if the vaccine works, Pfizer says it could apply for emergency use authorization (EUA) in early December or even late November.

Moderna is looking at a similar timeframe for its own mRNA-based vaccine. Data from its large clinical trial is due early next month and the firm says it expects to produce around 200 million doses this year and a billion doses in 2021, with EUA coming in December.

We believe both are likely to show at least a 60% efficacy benefit, and while durability of effect and long-term safety will remain unknown for the time being, these two mRNA vaccines have passed most safety hurdles. That appears to put them in better shape than the nonreplicating viral vector vaccines from Johnson & Johnson and AstraZeneca, the latter whose development has been paused due to potential safety concerns—although even here, the good news is that the trials look set to restart imminently.

In the worst-case scenario in which these leading mRNA-based and nonreplicating viral vector vaccines fail, Terri says she is most confident in the traditional protein subunit vaccine programs being run by a Sanofi and GSK partnership, and by Novavax. Data on these efforts is not expected until the first half of next year, however.

Neuberger Berman

October 26, 2020