A local hantavirus outbreak on an Atlantic cruise ship caused a brief, speculative frenzy in biotechnology stocks this week.
Shares of major vaccine developers fluctuated on Monday (May 11) as retail investors attempted to navigate the growing global health crisis.
The instability was caused by an outbreak of the Andes strain of hantavirus on the Dutch-flagged expedition vessel MV Hondius. However, the early market rally evaporated by the afternoon as global health officials and analysts systematically eliminated the possibility of mass infections or a meaningful commercial windfall.
Moderna (NASDAQ:MRNA) initially rose to US$59.48 in early trading, but reversed course, falling 3.6% to US$52.39. Peer companies also followed a similarly erratic trajectory. Inovio Pharmaceuticals fell 3.1 percent after an early premarket rally, while Novavax Inc (NVX: US) declined 5.4 percent and Emergent BioSolutions lost about 3.7 percent.
The sharp selloff came as Wall Street cautioned against viewing the isolated pathogen as a viable financial catalyst for the region.
“As a heavily retail-trafficked name, (Moderna) trades on outbreak headlines well beyond the underlying business implications,” Evercore ISI analysts wrote in a recent note. Reported by CNBC. “With respect to the current headlines, we do not see any meaningful revenue opportunity.”
The note further added, “Hantavirus is a low-incidence, structurally small market, and we view any potential big move as sentiment-driven, not fundamental. At best, it reinforces the agility of Moderna’s mRNA platform, which is already well understood.”
While Moderna is not currently relying on a commercial hantavirus vaccine, the company has confirmed that it is working on the virus.
The risk for other biotech firms caught in the business crossfire is even lower.
Inovio (NASDAQ:INO) has its roots in a 2011 Department of Defense grant to test a DNA vaccine delivery device that has never delivered a commercial product, while Novavax has no active hantavirus program.
The MV Hondius is docked in Teneriffe, Spain’s Canary Islands, where passengers and crew have begun disembarkation under strict protocols after waiting for several days.
To date, the World Health Organization (WHO) has reported eight cases linked to the ship, including three deaths, five of which have been confirmed as hantavirus.
Despite the deaths, officials are urging calm. Regulators continue to insist that hantaviruses pose no pandemic threat, a stance supported by decades of research on existing strains. This familiarity is in stark contrast to SARS-CoV-2, a new pathogen that was not detected until 2019.
WHO Director General Tedros Adhanom Ghebreyesus said Clearly that pathogen is “like no other COVID” and “the current public health risk from hantavirus is low.
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Securities Disclosure: I, Gian Liguid, do not have any direct investment interest in any of the companies mentioned in this article.
