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Questor: our vaccine stocks are fine, but nothing can inoculate airlines against Covid uncertainty

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syringes a plane and vaccine passport
syringes a plane and vaccine passport

Questor tipped four coronavirus vaccine makers between last August and this April and the black sheep of that family has been CureVac, the German-based but American-listed biotech firm.

While shares in BioNTech, Moderna (which we later sold at a large profit) and AstraZeneca have all performed well, especially the former two, those in CureVac have lost more than half their value after it announced disappointing vaccine efficacy last month. Time to throw them into the sharps bin?

Much of our intelligence on the vaccine stocks has come courtesy of Bianca Ogden of Platinum Asset Management, who as a former virologist is perhaps the best qualified fund manager on earth to evaluate these companies.

She acknowledged this week that BioNTech and Moderna enjoyed certain advantages over CureVac. But she said there was room for all to succeed in the field of mRNA-based vaccines and treatments for other conditions such as cancer.

“CureVac was not in the same league as Moderna and BioNTech when the pandemic started. Scientists at those companies are really forward thinking and masters at engineering. Both were also better financed before the pandemic,” she said. She added that the pair had also fared better than CureVac in forging partnerships to develop and manufacture their vaccines.

“BioNTech linking up with Pfizer was the right thing to do as it helped the firm to accelerate and make full use of Pfizer’s global clinical development network,” she said.

“Today it appears that CureVac’s first-generation vaccine may have required additional dose optimisation as well as different chemistry. A partner could possibly have assisted with that.” She added, however, that the next generation of its vaccine should benefit from the involvement of GlaxoSmithKline, with which CureVac entered into partnership last year.

“It really is more about the next generation of mRNA vaccines to come out of CureVac,” Ogden said.

But it was not simply a matter of one vaccine being better than another: the disease would best be tackled by a variety of inoculations rather than just one, according to the fund manager.

In a plea for “vaccine diversification” addressed last year to the government of Australia, where Ogden is based, she said: “In our view, combating the virus is a multiphase battle that requires different generations of vaccines.” She added this week: “We have trimmed our holding [in CureVac] but continue to have a small stake.”

Ogden remained bullish about BioNTech, whose share price touched new record highs of about $245 this week, to the benefit of readers who followed our original tip at $68.45 in August last year. “We do continue to hold BioNTech – nothing has changed there,” she said.

There’s no reason either to change our positive stance on AstraZeneca, especially as the bizarre witch hunt earlier directed against a firm that supplies the world with a life-saving vaccine on a non-profit basis seems to have abated. This reporter would like to extend his own thanks to the company for making his brush with Covid last week almost unnoticeable after two doses of its vaccine.

All three stocks are holds.

Questor says: hold

Tickers: Nasdaq: CVAC, Nasdaq: BNTX, AZN

Share prices at close: $52.64, $245.17, £84.56

Update: ‘Reopening’ stocks

The lifting of most legal restrictions two days ago is on the face of it the most decisive step yet towards normality. But Questor cannot help fearing that this virus has more tricks up its sleeve: it has wrong-footed us so many times already.

If these fears are well founded, shares in the most Covid-sensitive sectors – hospitality, leisure and travel – remain hugely risky. Pubs and restaurants may be lucky if Britain’s vaccination success enables us to avoid further lockdowns even if case rates remain high, but air travel and holidays depend on what happens abroad too, and that is even more unpredictable.

We won’t advise readers to bail out en masse; instead we’ll aim to revisit our airline recommendations (we tipped IAG, owner of British Airways, as a buy in February and rated easyJet a hold in March last year) individually in due course. But we would certainly caution against putting serious money into those stocks today when the future for aviation could hold almost anything.

Read the latest Questor column on telegraph.co.uk every Sunday, Tuesday, Wednesday, Thursday and Friday from 5am.

Read Questor’s rules of investment before you follow our tips.

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