June 3, 2023

A healthcare worker fills a syringe with the Moderna COVID-19 vaccine. At the Giorgio Companies site in Blandon, PA where the CATE Mobile Vaccination Unit was on site to deliver Moderna COVID-19 vaccines to workers on Wednesday morning April 14, 2021.

Ben Hasty | MediaNews Group | Getty Images

Stocks of two Covid vaccine makers fluctuated Thursday after the Biden government announced it would support a motion before the World Trade Organization to forego patent protection for the mRNA technology used to manufacture the vaccines.

Pfizer was down as much as 5% on Thursday from Wednesday’s close of trading, while Moderna fell nearly 12% before both stocks made up for most of those losses. The companies use the same mRNA technology to make their recordings.

Pfizer, which makes its Covid-19 vaccine with German pharmaceutical company BioNTech, closed about 1% that day, while Moderna lost about 1.4% that day.

South Africa and India are urging US officials and the WTO to temporarily forego patent protection so developing countries can manufacture life-saving vaccines until world leaders can bring the pandemic under control. Human rights organizations such as Doctors Without Borders, Oxfam and Amnesty International have all signed letters in support of the proposal.

US sales representative Katherine Tai released a statement Wednesday evening in support of the waiver.

“This is a global health crisis and the extraordinary circumstances of the COVID-19 pandemic call for extraordinary measures,” she said. “The government firmly believes that protecting intellectual property, but in the service of ending this pandemic, supports the removal of this protection for COVID-19 vaccines.”

Moderna CEO Stephane Bancel told investors on a earnings call Thursday that he had “not lost a minute of sleep” on the news and said traders’ concerns were false.

Johnson & Johnson and AstraZeneca both use an adenovirus, a common type of virus that typically causes mild cold symptoms, to make their Covid vaccines. The stocks of these two companies barely changed on Thursday.

President Joe Biden made an election promise last year to “absolutely positively” renounce vaccination patents. The waiver of patent protection can take months or even years.

Critics of the move say that developing countries do not have the infrastructure to produce the vaccines, others disagree.

Analysts largely shook off the news.

“We believe a new manufacturing operation can take 6 to 9 months to scale up, effectively limiting the impact of other manufacturers. While we expect the headlines to put pressure on MRNA, we don’t see any significant practical impact from this news,” said the Morgan Stanley analysts said in a research report Thursday.

Bank of America analysts cited “obstacles to vaccine development, including sourcing raw materials, developing manufacturing and engineering know-how.” They also note that “US support does not mean approval when WTO decisions require consensus and other members such as the EU, UK, Japan and Switzerland are currently opposed to surrendering intellectual property.”

The German Chancellor Angela Merkel spoke out against the exemptions together with these countries on Thursday. “The limiting factor in the manufacture of vaccines is the production capacity and high quality standards, not the patents,” a Merkel spokeswoman said in a statement.

The President of the European Commission, Ursula von der Leyen, did not accept the waiver plan and stated in a speech that she was “ready to discuss proposals that would address the crisis in an effective and pragmatic way”.

Both Pfizer and Moderna already have plans to produce billions of cans in the meantime, leaving essentially all competitors far behind in the manufacturing process.