4 ms·

I'm curious why the share price slide after the mainstream news. Sure, there have been rumours about the Lancet paper for a few days, maybe these were priced i

I'm curious why the share price slide after the mainstream news. Sure, there have been rumours about the Lancet paper for a few days, maybe these were priced in already - and AstraZeneca has promised to manufacture it at cost or near cost. Still weird the market reacted this way https://markets.businessinsider.com/news/stocks/astrazeneca-stock-price-reaction-oxford-covid19-trial-positive-results-2020-7-1029410447 https://markets.businessinsider.com/news/stocks/astrazeneca-...

greenonions 6y ago
Outside of publicity, I don't see this as having an enormous impact on profits. Companies will be compelled to produce the vaccine in any event, and will be compensated, but I can't imagine governments would be purchasing the vaccine for any large markup.
- nickff 6y ago
  The problem is that this is a money-losing proposition. If ten companies attempt to produce a vaccine, spending X, and two of them succeed (before the rest), with the government paying each double their development costs (2X), that means that the expected outcome of developing a vaccine is -0.6X. As a result, we should expect that most companies will only make a token effort.
- dharma1 6y ago
  I think it depends on the company, AstraZeneca CEO already said a while ago they will be manufacturing this at cost or near cost, this is a time for big pharma to give back. Some drug companies like Gilead though have very high markup, paid by the taxpayer. And some bioteh companies with mRNA vaccines in phase 1/2 trials like Moderna and Biontech, or protein treatment like Synairgen have seen share prices skyrocket. I guess the assumption is they will be collecting fees from the IP and/or future contracts for other drugs if this works out.
nrb 6y ago
“Buy the rumor, sell the news” https://www.ig.com/en/trading-strategies/-buy-the-rumour--sell-the-news--explained-190319 https://www.ig.com/en/trading-strategies/-buy-the-rumour--se...

greenonions 6y ago

Outside of publicity, I don't see this as having an enormous impact on profits. Companies will be compelled to produce the vaccine in any event, and will be compensated, but I can't imagine governments would be purchasing the vaccine for any large markup.

nickff 6y ago
The problem is that this is a money-losing proposition. If ten companies attempt to produce a vaccine, spending X, and two of them succeed (before the rest), with the government paying each double their development costs (2X), that means that the expected outcome of developing a vaccine is -0.6X. As a result, we should expect that most companies will only make a token effort.
dharma1 6y ago
I think it depends on the company, AstraZeneca CEO already said a while ago they will be manufacturing this at cost or near cost, this is a time for big pharma to give back. Some drug companies like Gilead though have very high markup, paid by the taxpayer. And some bioteh companies with mRNA vaccines in phase 1/2 trials like Moderna and Biontech, or protein treatment like Synairgen have seen share prices skyrocket. I guess the assumption is they will be collecting fees from the IP and/or future contracts for other drugs if this works out.

nrb 6y ago

“Buy the rumor, sell the news” https://www.ig.com/en/trading-strategies/-buy-the-rumour--sell-the-news--explained-190319 https://www.ig.com/en/trading-strategies/-buy-the-rumour--se...