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Pfizer & BioNTech Just Landed A $1.95 Billion Contract To Provide 100 Million Doses Of Its Coronavirus Vaccine

Jul. 22, 2020 4:05 PM ET
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  • Stocks were mixed to start Wednesday with the Dow falling just 43 points, or 0.2%.
  • The S&P 500 hovered around the flatline, and the Nasdaq gained 0.2%.
  • Genprex shares are up around 17% this morning following yesterday’s announcement that the National Institutes of Health awarded a $2.59 million grant to Dr. George K. Gittes, MD.

Plus, the U.S. ordered China to close its consulate in Houston, Nike announced a leadership shake-up, Slack filed a complaint against Microsoft with the European Commission, and United Airlines reported earnings.

Stocks were mixed to start Wednesday with the Dow falling just 43 points, or 0.2%. The S&P 500 hovered around the flatline, and the Nasdaq gained 0.2%.

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Pfizer and BioNTech shares are up this morning on news that the U.S. will pay the two $1.95 billion to produce and deliver 100 million doses of their COVID-19 vaccine if it proves safe and effective. Under the agreement, if one of the companies’ vaccines proves safe and effective in its large phase 3 trial and receives regulatory approval, the Department of Health and Human Services said that Pfizer will begin to deliver doses of the coronavirus vaccine to locations across the U.S. at the government’s direction, with the vaccine made available to Americans “at no cost.” “We’ve been committed to making the impossible possible by working tirelessly to develop and produce in record time a safe and effective vaccine to help bring an end to this global health crisis,” Dr. Albert Bourla, chairman and CEO of Pfizer, said in a statement. “We made the early decision to begin clinical work and large-scale manufacturing at our own risk to ensure that product would be available immediately if our clinical trials prove successful and an Emergency Use Authorization is granted.”

Tensions between the U.S. and China escalated further this morning after the U.S. ordered China to close its consulate in Houston. The State Department said that it has ordered the closure “to protect American intellectual property and Americans’ private information.” China condemned the decision, warning that there would be strong countermeasures if the U.S. fails to rescind the order immediately. “The unilateral closure of China’s consulate general in Houston within a short period of time is an unprecedented escalation of its recent actions against China,” said Chinese Foreign Ministry spokesperson Wang Wenbin. “Given, the Covid-19 crisis, how China handled the early stages of it and now the imposition of the national security law on Hong Kong, it’s really difficult to see how the U.S. and the west and China can get back to normal,” said Jimmy Chang, chief investment strategist at Rockefeller Asset Management. “The decoupling will only gain momentum in the coming year, unless there are major policy shifts within China. At this point, it doesn’t look likely.”

Nike announced a number of leadership changes and job cuts in an effort to focus on its digital business and selling more directly to customers as the coronavirus pandemic continues to spur a shift in shopping habits. Nike said that the personnel changes will lead to a “net loss of jobs across the company,” and a pre-tax, one-time employee termination cost of between $200 million and $250 million. The company said that it is shifting “to a new, simpler consumer construct of Men’s, Women’s and Kids will allow NIKE to create product with deeper insights and drive even greater specialization through performance sport and sport lifestyle.” Nike CEO John Donahoe said in a statement, “We are announcing changes today to transform NIKE faster, accelerate against our biggest growth opportunities and extend our leadership position. Now is the right time to build on NIKE’s strengths and elevate a group of experienced, talented leaders who can help drive the next phase of our growth.”

Slack shares are down more than -3% this morning after it said it has filed a complaint against Microsoft with the European Commission alleging anticompetitive behavior. The work communication platform alleges Microsoft abused its market dominance to eliminate competition for its competing Teams work communication product by tying it to its popular Office productivity suite, forcing millions to install the Teams app without the ability to remove it. “Microsoft is reverting to past behavior,” said Slack General Counsel David Schellhase in a press release announcing the complaint. “They created a weak, copycat product and tied it to their dominant Office product, force installing it and blocking its removal, a carbon copy of their illegal behavior during the ‘browser wars.’ Slack is asking the European Commission to take swift action to ensure Microsoft cannot continue to illegally leverage its power from one market to another by bundling or trying products.”

And in earnings news, United Airlines reported that it lost $1.63 billion in the second quarter as a result of the sharp decline in air travel demand amid the coronavirus pandemic. The carrier’s revenue dropped to $1.48 billion, marking an 87% drop from the $11.4 billion it posted for the same quarter last year. United said it expects to reduce its cash burn from an average of $40 million per day in the second quarter to $25 million a day in the third. And Snap shares are down nearly -8% this morning after it reported its net loss ballooned to $326 million, up around 28% from last year. The social media company blamed the higher losses on long-term investments to “build on the momentum we have established with out community, and our advertising partners,” as well as higher interest expense related to convertible notes. Snap reported a loss of $0.09 per share on revenue of $454 million, and said that its daily active users rose 4% to 238 million. “At the onset of widespread shelter in place orders, as people sought to stay connected and entertained from home, we observed an increase in daily active users that informed our initial estimate,” said Snap CFO Derek Andersen. “This initial lift dissipated faster than we anticipated as shelter in place conditions persisted.”

Stocks We’re Watching

Genprex Inc (NASDAQ: GNPX): Genprex shares are up around 17% this morning following yesterday’s announcement that the National Institutes of Health awarded a $2.59 million grant to Dr. George K. Gittes, MD of the University of Pittsburgh for Diabetes Gene Therapy Technology licensed from Genprex. “We are excited to receive this funding to support our research in diabetic primates as we move toward human clinical trials,” said Gittes, Co-Scientific Director and Professor of Surgery at the University of Pittsburgh Medical Center, and the lead researcher that developed Genprex’s potentially curative diabetes gene therapy. “We saw encouraging data in our preclinical mice studies, where the gene therapy reprogrammed pancreatic cells to restore normal blood glucose levels in diabetic mice for approximately four months, which could translate to decades in humans. More recently, preliminary results in non-human primates (monkeys) has also been very promising.”

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