Tuesday, May 19, 2020

Moderna’s Early Covid-19 Vaccine Data Boosts Sentiment

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What’s happening: Shares of Moderna spiked around 20% on Monday, after the company announced encouraging results from its covid-19 vaccine.

What happened: The Cambridge, Massachusetts-based company was among the first pharma companies to disclose plans of formulating a vaccine for coronavirus, which has affected almost 5 million people around the world.

The drug maker’s mRNA vaccine (mRNA-1273), which features in the list of WHO’s (World Health Organizations) top 8 vaccine candidates for covid-19, produced encouraging results in its Phase 1 clinical trial. As mentioned by regulations, the trial was a controlled one, with very few volunteers. The trial generated immune responses in eight healthy volunteers towards the SARS-CoV-2 virus.

Investor sentiment has been positive for Moderna, as its stock has gained a whopping 323% over the past three months. The announcement also gave another boost to global stock markets yesterday. With Moderna planning to commence its Phase 3 trial in July, analysts expressed certain concerns during the call on Monday.

What’s next: The volunteers in the study, who were given either low or medium doses of the vaccine, developed similar or higher levels of antibodies than those seen in the blood samples of people who have recovered from the covid-19 virus.

However, four adverse events were reported during the trial, of which three took place in participants receiving higher dosages. One person developed a skin reaction to the vaccine.

The trial, which is being conducted in partnership with the National Institute of Allergy and Infectious Diseases, will advance to Phase 2 trial shortly. Moderna said that the Food and Drug Administration has approved the drug candidate for its Phase 2 trial.

The company will also try to determine the best dosage for the late-stage experiment. The drug maker is planning to initiate Phase 3 trials in July, provided the mid-stage trial succeeds. Analysts were concerned, however, regarding the availability of enough people with covid-19 in regions where the company is likely to conduct the trial.

How the shares have performed so far: Shares of Moderna climbed 19.6% on Monday, following the release of positive vaccine results. The stock has surged by 71% over the past month and is up 309% since the beginning of the year.

What to watch: Moderna announced late Monday its plans to raise over $1.3 billion in a secondary public offering in order to meet the funding requirements for its vaccine. With successful Phase I results, investors expect the company to clear the next stages of the trial as early as possible. Investors believe the company will not face any funding issues, as it is developing a critical vaccine to tackle the current crisis.

The Markets Today

     

Gold will be in focus today, after the precious metal posted its first loss in five sessions on Monday.

Context: Gold prices closed yesterday’s session on a downbeat note after recording gains earlier in the session as encouraging covid-19 vaccine results boosted the US stock market, lowering demand for the safe-haven metal.

Details: Earlier in the session, gold prices were on track to deliver their strongest performance since 2012. Traders dumped the metal, however, after news of positive results from an early stage clinical trial by Moderna for its mRNA vaccine in treating the covid-19 infection.

After touching an intraday high of $1,775.80 earlier in the session, gold for June delivery tumbled 1.3% to settle at $1,734.40 an ounce on the Comex. The metal’s price had risen 2.5% last week. July silver rose 2.3% to $17.468 an ounce on Monday, after climbing 8.2% last week.

Gold prices have been range bound in recent weeks, with the metal trading between a low of $1,676 and a high of $1,788 given investor concerns regarding the economic damage caused by the pandemic.

In other metals, July copper rose around 3.2% to $2.404 a pound, while July platinum gained 6.4% to $869.30 an ounce on Monday.

What to watch: Gold prices are expected to remain under pressure in today’s session as well, with global markets still upbeat on the vaccine news. US stocks are also expected to open on a positive note today, with stock futures trading higher in the European session.

Investors continue to keep an eye on the daily coronavirus numbers, with the total cases exceeding 4.8 million globally. The US has so far confirmed more than 1.5 million cases with around 90,360 deaths.

Other Markets: European indices were trading higher at 9:00am GMT, with the FTSE 100, German 30 and French 40 up by 0.3%, 0.9% and 0.3%, respectively.

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What else to watch today

     

South Africa’s mining production, gold production and manufacturing production, Russia’s GDP growth as well as the US Redbook index, housing starts, building permits and API crude oil stock change.