Morning Notes — Vaccine Implications

Interim data from the Phase 3 PFE/BNTX study are expected late next month with Phase 3 MRNA results shortly thereafter and an update from Oxford/AZNA sometime in November.  These are the three frontrunners, but there are currently ~38 vaccines undergoing human clinical evaluations and another ~150 in preclinical development.  We don’t see this as a winner-take-all event or approaching this as a company-specific investment opportunity.  First interim results are often inconclusive with a very high statistical bar to stop a trial based on positive data.  However unlikely, that scenario would lead to a very rapid recovery in hospitality/airlines stocks and value sector outperformance at the expense of Tech.  But even inconclusive interim data will have implications for markets with more scenarios leading to outperformance in value sectors.  Negative results from one vaccine candidate could have positive read throughs to another design or platform.  Keep an eye on the S&P 500 Value Index (SVX) and Russell 2000 Index (RTY) for early clues.  By the way, prior to the widespread availability of vaccines, rapid antigen testing has emerged as a possible stop-gap measure to help airlines recover.  Lufthansa announced it will begin offering rapid COVID antigen tests to passengers in October, while Alitalia announced it will begin flights from Rome to Milan that only allow passengers who’ve tested negative within the last 72 hours.