Vaccine safety controversy rekindles, causing biotech stocks to fall. Citigroup releases cautious outlook.

Last Friday, it was reported that Trump administration health officials planned to present claims related to 25 child deaths and the COVID-19 vaccine to a key vaccine advisory committee under the Centers for Disease Control and Prevention (CDC) this week. The claims were reportedly included in a report that Trump administration health officials planned to submit to the Advisory Committee on Immunization Practices (ACIP) this week. This committee plays a critical role in determining vaccine access as it reviews immunization data and makes recommendations on who should be eligible for vaccination and whether insurance companies should provide coverage. As a result of this news, biotech stocks on the US stock market saw a sharp decline last Friday, with BioNTech (BNTX.US), which is developing a COVID-19 vaccine, dropping 7.26%, its COVID-19 vaccine development partner Pfizer Inc. (PFE.US) falling 3.98%, and other companies also working on COVID-19 vaccines such as Moderna (MRNA.US) and Novavax, Inc. (NVAX.US) dropping 7.40% and 3.62% respectively. In response to this, Citigroup issued a research report stating that the stock prices of related biotech companies were under pressure due to the report, highlighting once again the volatility risk. The firm added that while judgment will have to wait until this week, it is important to emphasize that the COVID-19 vaccine has undergone extensive robust research, with data from billions of doses administered as support. Overall, given the ongoing news volatility, the firm remains cautious about the sentiment towards companies related to the COVID-19 vaccine. Below are Citigroup's ratings for companies related to the COVID-19 vaccine. 1. BioNTech Citigroup rates BioNTech's stock as a "Buy" with a target price of $140. The firm considers the stock to be "high risk" due to the typical volatility of biotech stocks and uncertainty/risk in clinical trials and late-stage drug development. Citigroup pointed out that downward risks facing BioNTech include: instability of the COVID-19 vaccine market, leading to accelerated decline in revenues; failure of ADC (antibody-drug conjugate) product data to demonstrate durability, endangering accelerated or traditional approval possibilities; insufficient OS (overall survival) data for the immunotherapy product portfolio to surpass current treatment standards; lack of compelling data from FixVac and iNEST platforms. 2. Moderna Citigroup rates Moderna's stock as "Neutral" with a target price of $30. The firm also considers the stock to be "high risk," with downward risks including: instability of the COVID-19 vaccine market, leading to accelerated decline in revenues; difficulty in penetrating the RSV (respiratory syncytial virus) market (two existing giants + ACIP's lack of re-vaccination guidance); failure of the CMV (cytomegalovirus) vaccine to reach the minimum 50% efficacy standard; continued delay in CMV event accumulation; unexpected resistance facing rare disease assets. However, Citigroup added that the stock faces upward risks, including: higher-than-expected market penetration rates for two respiratory vaccines already on the market; improvement in vaccine policy environment; CMV vaccine showing >50% efficacy. 3. Novavax, Inc. Citigroup rates Novavax, Inc.'s stock as "Sell" with a target price of $6. The firm stated that the stock faces upward risks, including: unexpected recovery in the COVID-19 vaccine market, leading to faster market acceptance; efficient, successful, and market adoption of the Sanofi flu + COVID-19 vaccine using Novavax, Inc.'s Matrix-M adjuvant, which could bring in higher-than-expected royalty income. 4. Pfizer Inc. Citigroup has a target price of $26 for Pfizer Inc. The firm pointed out that upward risks for the stock include: sales of the newly acquired ADC drugs exceeding expectations; clinical pipeline results better than expected; sales of growth products exceeding expectations. In addition, downward risks for the stock include: lower-than-expected sales of the breakthrough breast cancer drug Ibrance due to competition; downward revision of sales estimates for Padcev due to increased competition in the bladder cancer field; value-destructive mergers and acquisitions; disappointing pipeline data that could have a negative impact on the target price.