Pfizer (NYSE:PFE) is delivering a beautiful day for the stock market — and the entire world. Shares of the pharmaceutical giant were surging ahead 15% on Monday, and leading a massive rally. So what is behind the major move in Pfizer stock?
Remember, Pfizer is one of the leading companies in the race to develop treatments and vaccines for the novel coronavirus. Over the last several months, it has been working with BioNTech (NASDAQ:BNTX) to develop a vaccine candidate for the virus. Importantly, it has continued to reach milestones — like entering late-stage clinical trials — at record speeds.
Today, Pfizer and BioNTech took it up a notch. Together, they shared that early results from their Phase 3 human trials were extremely promising. In fact, those early results suggest the vaccine is 90% effective in preventing Covid-19. This is a major victory against the pandemic, and it also makes the pharmaceutical duo the first to share large-scale vaccine data.
Unsurprisingly, the whole stock market is cheering on Pfizer stock and BNTX stock. Investors have long been waiting for a catalyst to return to normal, and the two companies just delivered one. Along with the early results, the duo also shared that there have been no real safety concerns from their large-scale trials. This means that later in the month, they will file with the U.S. Food and Drug Administration for emergency-use authorization. From there, it is a matter of logistics and manufacturing to start vaccinating the world.
Pfizer Stock Pops on Vaccine Catalyst
So, what do investors really need to know about Pfizer stock? Beyond the surface-level success, there are two things that stand out.
The first is what Pfizer and BioNTech represent for reopening. With a vaccine, there would be less concern about social distancing. Many on Wall Street therefore assume that a vaccine is key to fully reopening businesses, schools and entertainment venues. We are seeing that play out today — Norwegian Cruise Line (NYSE:NCLH) is mounting a 30% rally and AMC Entertainment (NYSE:AMC) is climbing more than 70%. Both of these hard-hit businesses are largely dependent on an effective vaccine to return to normal operations.
The second catalyst comes down to the science and what it represents for the future. Pfizer and BioNTech are working with a messenger RNA (mRNA) vaccine candidate. This innovative candidate would make history in many ways. Importantly, the FDA has never approved a mRNA vaccine. If Pfizer and BioNTech make it through to the next steps, theirs would be the first.
So what comes next? The duo has already signed a $1.95 billion contract with the U.S. in exchange for 100 million doses. Similarly, Pfizer and BioNTech have worked to partner with the European Union, United Kingdom, Canada and Japan. Although some manufacturing is already underway — they plan to deliver 50 million doses by the end of 2020 — there is a lot left. Expect manufacturing and delivery to be in focus through the end of the year and the start of 2021.
There is no denying that the news is exciting. At least for today, Pfizer and BioNTech have lifted a heavy coronavirus cloud.
On the date of publication, Sarah Smith did not have (either directly or indirectly) any positions in the securities mentioned in this article.
Sarah Smith is a Web Content Producer for InvestorPlace.com.