Politics will matter greatly for the biotechnology and healthcare sectors. On Thursday, President-elect Trump said that anti-vaccine activist Robert F. Kennedy Jr. will lead the Department of Health and Human Services.
The news sent Moderna (MRNA) down by 5.62% to close at $39.77. Shares have been in a downtrend since peaking in May at $170.47. Novavax (NVAX) lost 7.02% on the day. Short sellers hold a 26.13% short float against NVAX stock and 10.02% on MRNA stock.
Markets did not spare BioNTech (BNTX) either, which dropped by 7%. Pfizer (PFE), a partner in the Covid vaccine development with BioNTech, is trading at $26.02, a price not seen since May 2024.
Investors will need to avoid vaccine developers in the biotech space. In addition, the appointment may indirectly hurt Merck (MRK), Regeneron (REGN), and Bristol-Myers Squibb (BMY). Stock markets do not like uncertainty due to RJK Jr.’s position.
Investors could hold conglomerates like Proctor & Gamble (PG) or J&J (JNJ) instead. Those firms sell household products in addition to drugs.
Your Takeaway
Expect a slowdown in vaccine development and updates for existing ones. Changes in the FDA trial rules will change the economics of drug development. If the government adds unnecessary layers to the process, it would slow down the timely approval of drugs.
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