AstraZeneca gets a Booster shot from Trump report by Investing.com

By Geoffrey Smith

Investing.com – European equities opened strongly this week, showing optimism about the rapid deployment of at least one vaccine to bring the Covid-19 pandemic under control.

The benchmark rose 1.7% to 371.24, a level that still leaves it almost 2.5% below its post-pandemic high. In contrast to U.S. markets, which have regained momentum as a second wave of Covid-19 infections has disappeared, European equities have been plateauing in recent weeks as the economic recovery has caused fears of another wave – even though infection rates are well below U.S. levels.

The Financial Times reported over the weekend that President Donald Trump is preparing for normal drug authorization procedures to ensure that the vaccine is developed jointly by AstraZeneca (NYSE 🙂 and the University of Oxford can be made available for the November 3 U.S. election^rd.

The story came when the Food and Drug Administration issued the emergency use authorization of convalescent plasma for treatment of Covid-19 patients. FDA Commissioner Stephen Hahn said the measure is not a complete approval and that the agency has not reviewed any evidence on its effectiveness and safety.

Trump had won on Twitter on Sunday against “interests of ‘deep state’ at the Food and Drug Administration which he claimed was delaying the approval process to stop him being re-elected. It is unclear to whom he referred. Hahn was appointed by Trump himself.

However, AstraZeneca’s share in London received a predictable boost from the news, up 3.1% on a day when Europe’s major indices were all up more than 1.5%.

But for AstraZeneca, as for many other pharma and biotech companies developing a cure for the coronavirus, the market now seems inoculated against its own hype.

AstraZeneca’s stock peaked a month ago, at a level almost 7% higher. Italy’s DiaSorin (LON 🙂 stock remains more than 20% below its May peak, Biontech (F 🙂 stock mentioned in Germany is almost 30% down from its peak in July, despite a constant stream of positive test results for the drug it developed together with Pfizer (NYSE :). Modern (NASDAQ 🙂 is 30% off in the US, not helped by the sight of occupants of companies that are after days of exit after dumping new shares on the public market, while Novavax (NASDAQ 🙂 is active 24% below the high.

In most of these cases, stock prices peaked within days of July 16, when the US hit what is – to date – its highest daily number of new infections at more than 77,000. As confidence has grown that there will be no return to generalized lockdowns, the premium that the market has placed on fax has fallen.

By that logic, the shares could all come back nicely as the reopening of schools in Europe and North America, combined with the onset of colder weather, turned business numbers higher again.

But the sector could live to see the public politicization of the drug approval process in the longer term. A poll by Yahoo and YouGov last month indicated that only 40% of U.S. adults would actually take a vaccine that was approved in the current circumstances.

The risk of approving a vaccine that is ineffective, if directly insecure, is probably small, but it is quite clearly real. That would be a disaster as far as the contents of Covid-19 are concerned. But discrediting the principle of vaccination, at a time when it is already threatened by so many unfounded conspiracy theories, would carry untold risks to public health for years.