Pfizer Inc.’s US$48 billion gain in market value since late March, egged on by optimism for a successful Covid-19 vaccine, may soon hit a wall.
Among the top three developers, Pfizer may be first to reveal late-stage results from its trials of tens of thousands of people with partner BioNTech SE. And if history is any guide, the shares may eventually head lower no matter what the data show.
Goldman Sachs Group Inc. calls it the vaccine trade — where daytrading generalist investors pile into stocks developing treatments and vaccines for the disease, then flee shortly after results or updates that appear to be good news. It happened to Gilead Sciences Inc. — shares of the drugmaker fell back to earth as soon as its antiviral medicine for Covid-19 secured a regulatory nod in early May.
For Pfizer, the vaccine fueled run-up has gotten ahead of “the fundamental opportunity,” JPMorgan Chase & Co. analyst Chris Schott said in a research note. The bank’s clients were most bearish on Pfizer, he said.
The recently expanded late-stage study in 44,000 patients of Pfizer and BioNTech’s messenger-RNA vaccine may have data in coming weeks. Pfizer targets a regulatory filing on its shot in the U.S. as soon as October. Moderna Inc.’s late-stage data and AstraZeneca Plc’s efforts with the University of Oxford aren’t far behind. Astra’s trial in the U.K. has resumed after a pause of less than a week after a participant fell ill.
“Buying ahead of the data is quite risky,” said Adam Barker, an analyst with Shore Capital Group Ltd. “The next big data readouts will actually tell us whether the vaccine has worked or not,” he said. “If its efficacy is less than a 50 per cent reduction in risk, that’s not ideal,” he said, alluding to the Food and Drug Administration’s bar for approval.
Pfizer didn’t immediately respond to an email or phone call requesting comment.
Generalists, Specialists
On the day after data is released for major vaccine players, “the focus will shift to commercial execution,” said Mani Foroohar, an analyst at SVB Leerink, who recently gave Moderna it’s first bear call. “It’s a very different skill set of investing as opposed to trading,” he said in a phone interview.
Goldman Sachs analyst Asad Haider agreed, writing that “generalists seem focused on playing forward headlines on vaccine progress as feeding into the recovery/reopen trade.” On the other hand, “specialists continue to debate, among other things, the economics for all vaccine players with a generally negative bias,” according to a client note last month.
Stocks with Covid-19 medicine results typically outperform ahead of an update as well as the two days immediately after before fading and giving back advances in the following four days, according to Goldman’s historical analysis.
Options analysis imply a 12 per cent share move in either direction for Pfizer by November. For partner BioNTech, options suggest an even wider move — in the 50 per cent range. American depository receipts of the German company have doubled this year, though the stock has fallen from a record in July on the heels of a stock offering.
The trials will gauge how effective a vaccine is based on infection rates in those getting a placebo compared with those getting a shot and may produce interim results as soon as the first 30 or 40 people become infected. How quickly those infections occur will have an impact on the timing of interim results.
“It’s truly a numbers game,” Yaron Werber, an analyst at Cowen & Co., said in a phone interview. Werber and a handful of other Wall Street analysts view the Pfizer and BioNTech vaccine as the most promising so far, though the advantages are based on surrogate measures of neutralizing antibody and immune-fighting T-cell levels that only offer suggestions of how effective the shots may be.
The timing of a vaccine has come under increasing scrutiny as the U.S. presidential election nears and President Donald Trump appears to be pressuring the Food and Drug Administration for a shot, despite assurances from the agency as well as some drugmakers that decisions will be based on science.
Market strategists have been optimistic. UBS Group AG sees more than a 50 per cent chance of a vaccine by the first half of 2021. “The equity market is pricing in less than that, particularly at the industry/stock level,” the bank’s strategists led by Keith Parker wrote. “This implies the balance of risks is tilted to the upside.”
Broader Market
There’s a difference between the impact for the market and for individual companies, according to Daniel Mahony, a health-care fund manager at Polar Capital LLP in London. If Pfizer announces data that suggest something meets the FDA’s gating criteria of at least 50 per cent effectiveness, markets may get a “slight relief that actually we might be getting a tool that can help governments get this under control,” he said.
Still, promising signs from earlier vaccine studies don’t “necessarily mean that’s going to work,” he said. “We just have to wait for the data.”
VANCOUVER – West Fraser Timber Co. Ltd. says it’s indefinitely curtailing its sawmill in Lake Butler, Fla., by the end of the month.
The Vancouver-based company says the decision is because of high fibre costs and soft lumber markets.
West Fraser says the curtailment will affect about 130 employees, though it will mitigate the impact by providing work opportunities at other locations.
The company says high fibre costs at Lake Butler and the current low-price commodity environment have made it difficult to operate the mill profitably.
It expects to take an impairment charge in the third quarter associated with the curtailment.
At the beginning of this year, West Fraser said it was closing a sawmill in Maxville, Fla., and indefinitely closing another in Huttig, Ark.
This report by The Canadian Press was first published Sept. 19, 2024.
TORONTO – Canada Goose Holdings Inc. says it has signed a deal that will result in the creation of its first eyewear collection.
The deal announced on Thursday by the Toronto-based luxury apparel company comes in the form of an exclusive, long-term global licensing agreement with Marchon Eyewear Inc.
The terms and value of the agreement were not disclosed, but Marchon produces eyewear for brands including Lacoste, Nike, Calvin Klein, Ferragamo, Longchamp and Zeiss.
Marchon plans to roll out both sunglasses and optical wear under the Canada Goose name next spring, starting in North America.
Canada Goose says the eyewear will be sold through optical retailers, department stores, Canada Goose shops and its website.
Canada Goose CEO Dani Reiss told The Canadian Press in August that he envisioned his company eventually expanding into eyewear and luggage.
This report by The Canadian Press was first published Sept. 19, 2024.
Almost seven years since news broke of an alleged conspiracy to fix the price of packaged bread across Canada, the saga isn’t over: the Competition Bureau continues to investigate the companies that may have been involved, and two class-action lawsuits continue to work their way through the courts.
Here’s a timeline of key events in the bread price-fixing case.
Oct. 31, 2017: The Competition Bureau says it’s investigating allegations of bread price-fixing and that it was granted search warrants in the case. Several grocers confirm they are co-operating in the probe.
Dec. 19, 2017: Loblaw and George Weston say they participated in an “industry-wide price-fixing arrangement” to raise the price of packaged bread. The companies say they have been co-operating in the Competition Bureau’s investigation since March 2015, when they self-reported to the bureau upon discovering anti-competitive behaviour, and are receiving immunity from prosecution. They announce they are offering $25 gift cards to customers amid the ongoing investigation into alleged bread price-fixing.
Jan. 31, 2018: In court documents, the Competition Bureau says at least $1.50 was added to the price of a loaf of bread between about 2001 and 2016.
Dec. 20, 2019: A class-action lawsuit in a Quebec court against multiple grocers and food companies is certified against a number of companies allegedly involved in bread price-fixing, including Loblaw, George Weston, Metro, Sobeys, Walmart Canada, Canada Bread and Giant Tiger (which have all denied involvement, except for Loblaw and George Weston, which later settled with the plaintiffs).
Dec. 31, 2021: A class-action lawsuit in an Ontario court covering all Canadian residents except those in Quebec who bought packaged bread from a company named in the suit is certified against roughly the same group of companies.
June 21, 2023: Bakery giant Canada Bread Co. is fined $50 million after pleading guilty to four counts of price-fixing under the Competition Act as part of the Competition Bureau’s ongoing investigation.
Oct. 25 2023: Canada Bread files a statement of defence in the Ontario class action denying participating in the alleged conspiracy and saying any anti-competitive behaviour it participated in was at the direction and to the benefit of its then-majority owner Maple Leaf Foods, which is not a defendant in the case (neither is its current owner Grupo Bimbo). Maple Leaf calls Canada Bread’s accusations “baseless.”
Dec. 20, 2023: Metro files new documents in the Ontario class action accusing Loblaw and its parent company George Weston of conspiring to implicate it in the alleged scheme, denying involvement. Sobeys has made a similar claim. The two companies deny the allegations.
July 25, 2024: Loblaw and George Weston say they agreed to pay a combined $500 million to settle both the Ontario and Quebec class-action lawsuits. Loblaw’s share of the settlement includes a $96-million credit for the gift cards it gave out years earlier.
Sept. 12, 2024: Canada Bread files new documents in Ontario court as part of the class action, claiming Maple Leaf used it as a “shield” to avoid liability in the alleged scheme. Maple Leaf was a majority shareholder of Canada Bread until 2014, and the company claims it’s liable for any price-fixing activity. Maple Leaf refutes the claims.
This report by The Canadian Press was first published Sept. 19, 2024.
Companies in this story: (TSX:L, TSX:MFI, TSX:MRU, TSX:EMP.A, TSX:WN)
