Moderna: Volatility of medicine

With many companies and corporations racing to find a vaccine for the novel Coronavirus, any positive news surrounding treatments, and their success is well received in the stock market.


The most recent "big news" coming from the medical sector was the early success of Moderna's COVID-19 vaccine. The vaccine successfully completed phase 1 of clinical trials led by the National Institutes Health. During the study, scientists measured the amount of neutralizing antibodies of 8 participants injected with the vaccine, and all 8 demonstrated levels of neutralizing antibodies that met/exceeded the levels present in patients that have naturally recovered from COVID-19. Neutralizing antibodies fight against the virus by binding to it and not allowing it to attack human cells.


Dr. Tal Zaks, Moderna's chief medical officer, remarked that "we've demonstrated that these antibodies, this immune response, can actually block the virus," and believes that "this is a very important first step in our journey towards having a vaccine".


The drug has been approved for phase 2 of testing but is projected to be made readily available between January to June next year.


As a result of this news, the stock price of Moderna rose by 20%, up to $80. However, reports later on Tuesday addressed the early nature of the vaccine's success, combined with NIH's lack of press despite being partnered with Moderna, and expert opinion that more data is needed for conclusive evidence, stocks slid 10% on Tuesday and are currently sitting on $73.47 at Wednesday close.


The dangers of speculation of drug effects are that it causes prices to become increasingly volatile, it just takes one set of data to either skyrocket share prices or makes them plunge. After just one phase of speculative success, which wasn't endorsed by NIH nor multiple experts, share prices went haywire.


Of course, this volatility should be expected. The ability of the workplace to function full speed is now dependent on an effective, mass-produced vaccine being released. In the case of Moderna, the bullish side came out, and investors jumped in without fully realizing there are still multiple trials and at least a year before the vaccine is officially out. That's a long timeline, and many things could go wrong during that time, not to mention Moderna most likely won't be the only one producing a Coronavirus vaccine.


Moreover, could the sudden price spikes represent something more abstract, like investors hopefulness for the economy to come back to full force?


No question investors and consumers alike would rather not be quarantined, and any hopeful news would pique interest. Maybe Moderna's recent share price rise not only resulted because of the vaccine's early success but also because of the average investor's desperation for life to return to normal.


Any thoughts? Feel free to comment below

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