A new, super-efficient Covid-19 vaccine, developed by leading US and German companies, heralds “the start of the end of the pandemic”, according to the Economist magazine – a sentiment shared by investors who rushed out to buy shares in cruise lines and airlines, sending travel stock prices surging 30% and more.
Shares in Pfizer, the American pharmaceutical firm behind the breakthrough, also roared ahead yesterday, gaining 15% immediately after company revelations that its coronavirus vaccine was 90% effective in late-stage trials. The other company involved in the vaccine breakthrough is Germany’s BioNTech.
Pfizer chief executive Albert Bourla said the Pfizer-BioNTech vaccine’s success could be the most significant medical advance the world has seen in the past 100 years.
“It’s a great day for humanity,” he said.
The firm plans to seek Emergency Use Authorization from US health officials later this month.
For the travel industry, this could be the news that saves the world – or the world of travel, at any rate. It will take time to produce the vaccine, but a rollout next year is likely. The industry will need help to survive in the meantime, but the good news should help boost early bookings. Pent-up demand for travel is immense.
As the news broke yesterday, financial website TheStreet.com reported spectacular gains in travel share prices, with American Airlines stock lifting off to gain 25%, Delta Air Lines climbing 19%, United Airlines rising 20% and Southwest Airlines gaining 16%. Carnival Cruise Line’s share price rocketed higher by 39.3%, CNBC reported. Norwegian Cruise Line shares gained 27%, while Royal Caribbean shares rose 23%.
Pfizer and its research partner BioNTech, announced that the vaccine on which they have been collaborating is more than 90% effective in preventing symptomatic cases of covid-19. The Economist called this “an astonishing result for a first-generation vaccine” adding that “many had not dared to hope for efficacy of anything over 70%”. The vaccine’s 90% effectiveness was “as good as it gets, and bodes well for other vaccines”, the writer noted.
The Pfizer-BioNTech trial is one of four potential vaccines the Australian Government has signed a provisional agreement to purchase.
The prospect of life returning to some sort of normality next year sent the S&P 500 up by 3.6%. Airlines, cruise lines, banks, cinema chains, all saw share prices rise. Walt Disney Company shares soared 11.9%. On the local market, Qantas shares shot up from A$4.66 to A$5.20. The Australian dollar climbed to 73.40 US cents by Tuesday morning, later falling back a little. The ASX 200 index rose nearly 2.2% to 6438, ABC News reported.
While the development is a major shot in the arm for travel (so to speak), the vaccine is not quite a magic bullet. It must be stored extremely cold (forget putting it in the fridge; this needs to be kept at -80⁰C) which is tricky and makes distribution challenging. Vaccination requires two jabs three weeks apart. Also, the extent to which the vaccine works in elderly people is still being worked out – and it’s not yet clear how long any immunity would last. But it’s a great start and other vaccines are on the way.
The Pfizer-BioNTech vaccine is being tested on an ethnically diverse group of 43,000 people. Yesterday’s results derive from an interim analysis conducted by an independent data-monitoring group.
Two more prominent vaccines are being developed, one from AstraZeneca with a team at Oxford University; the other from US biotechnology company Moderna. More news about them is expected in coming weeks.
Current projections suggest 50 million vaccine doses will be available in 2020, and 1.3 billion in 2021, the Economist reports.
Some ironies are apparent. If the announcement had come just a week or two earlier, the resultant wave of euphoria could well have saved the presidency for Donald Trump, turning a narrow defeat into a victory. Trump has often said an American vaccine is just around the corner – and here it is, bearing out his words.
“We’re very close to that vaccine as you know and I think much closer than I think most people want to say,” Trump said in September.
Meanwhile, governments are finding imaginative ways to conjure up money, seemingly by sleight-of-hand, to keep their economies afloat in the face of the pandemic. For an excellent (and eyebrow-raising) analysis on how that works, try this, written a couple of days ago by the ABC’s business editor, Ian Verrender: Why stocks and housing are booming through the coronavirus recession while wages and savings stagnate
Written by Peter Needham
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