For financial professionals in Uruguay

COVID variants: The impact on pandemic trajectory & biopharma stocks

New COVID-19 variants are making it harder to forecast the trajectory of the global pandemic, as well as the potential impact on vaccine developers’ stocks. Portfolio Manager and Research Analyst Dan Lyons and Research Analyst Agustin Mohedas help make sense of the latest clinical data and what investors should consider now.

Key Takeaways

  • Research shows that COVID-19 variants have reduced the efficacy of existing vaccines, but data also show that vaccines still provide protection against severe cases.
  • The variants may delay the goal of reaching herd immunity, especially if virus mutations allow for reinfection. However, new drug modalities are making it possible to quickly develop booster shots tailored for variants.
  • Stocks of COVID-19 vaccine makers have benefited in recent months. But the long-term value of vaccine programmes could depend on whether the vaccine platforms can be deployed for other illnesses, such as influenza.

Footnotes

An adjuvant is an immunological agent that improves the immune response of a vaccine.

An antibody is produced by the immune system in response to a foreign substance, called an antigen, in the body. The role of antibodies is to recognise and latch on to antigens in order to remove them from the body.

mRNA, or messenger RNA, carries the genetic information copied from DNA to other parts of the cell for processing. The mRNA approach to fighting COVID-19 uses the mRNA to elicit an immune response to build immunity.

A spike protein is a type of protein that protrudes the outside of a virus and can facilitate entry of the virus into a host cell. The presence of a spike protein alone is often enough to elicit an immune response without the need for the whole virus to be present.

A T-cell, or T-lymphocyte, is a type of white blood cell that is involved in controlling and shaping the body's immune response to infection.

 

These are the views of the author at the time of publication and may differ from the views of other individuals/teams at Janus Henderson Investors. Any securities, funds, sectors and indices mentioned within this article do not constitute or form part of any offer or solicitation to buy or sell them.

 

Past performance does not predict future returns. The value of an investment and the income from it can fall as well as rise and you may not get back the amount originally invested.

 

The information in this article does not qualify as an investment recommendation.

 

Marketing Communication.

 

Glossary

 

 

 

Important information

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The Janus Henderson Horizon Fund (the “Fund”) is a Luxembourg SICAV incorporated on 30 May 1985, managed by Janus Henderson Investors Europe S.A. Janus Henderson Investors Europe S.A. may decide to terminate the marketing arrangements of this Collective Investment Scheme in accordance with the appropriate regulation. This is a marketing communication. Please refer to the prospectus of the UCITS and to the KIID before making any final investment decisions.
    Specific risks
  • Shares/Units can lose value rapidly, and typically involve higher risks than bonds or money market instruments. The value of your investment may fall as a result.
  • Shares of small and mid-size companies can be more volatile than shares of larger companies, and at times it may be difficult to value or to sell shares at desired times and prices, increasing the risk of losses.
  • If a Fund has a high exposure to a particular country or geographical region it carries a higher level of risk than a Fund which is more broadly diversified.
  • The Fund is focused towards particular industries or investment themes and may be heavily impacted by factors such as changes in government regulation, increased price competition, technological advancements and other adverse events.
  • The Fund may use derivatives towards the aim of achieving its investment objective. This can result in 'leverage', which can magnify an investment outcome and gains or losses to the Fund may be greater than the cost of the derivative. Derivatives also introduce other risks, in particular, that a derivative counterparty may not meet its contractual obligations.
  • If the Fund holds assets in currencies other than the base currency of the Fund or you invest in a share/unit class of a different currency to the Fund (unless 'hedged'), the value of your investment may be impacted by changes in exchange rates.
  • When the Fund, or a hedged share/unit class, seeks to mitigate exchange rate movements of a currency relative to the base currency, the hedging strategy itself may create a positive or negative impact to the value of the Fund due to differences in short-term interest rates between the currencies.
  • Securities within the Fund could become hard to value or to sell at a desired time and price, especially in extreme market conditions when asset prices may be falling, increasing the risk of investment losses.
  • The Fund may incur a higher level of transaction costs as a result of investing in less actively traded or less developed markets compared to a fund that invests in more active/developed markets. These transaction costs are in addition to the Fund's Ongoing Charges.
  • The Fund could lose money if a counterparty with which the Fund trades becomes unwilling or unable to meet its obligations, or as a result of failure or delay in operational processes or the failure of a third party provider.