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American pharma giant Pfizer and Germany’s BioNTech announced their COVID-19 vaccine is 90% efficient, triggering a massive rally in markets. Pfizer has not been waiting for the results to begin producing doses, with some countries are already pre-ordering them. However, it may take long winter months until a significant part of the population can receive the vaccine, per Danske Bank.

Key quotes

“On Monday, Pfizer and BioNTech released interim study results of the late-stage phase 3 trial of their vaccine candidate. According to the results, the efficacy of the vaccine is more than 90%. We think it is important to remember that efficacy is defined as preventing disease (i.e. not getting sick) and not preventing infections. This means that we do not know whether the virus gets less infectious among vaccinated people, or whether the vaccine prevents severe COVID-19 or whether it protects the vulnerable and elderly.” 

“Vaccine still needs approval (like the rest of the vaccines currently in phase 3 trials), to be produced and then distributed. This will not happen overnight, so we have not fundamentally changed our view that we are heading for a long winter with restrictions in the northern hemisphere, especially in Europe. However, it probably means that the risk that we need to do it all over again next autumn and winter is declining.” 

“The best-case scenario from the outset of the virus has been that a vaccine could be ready by the end of the year or early 2021. If this scenario turns into the baseline scenario, then a huge cloud of uncertainty would be lifted over the next six months adding a big boost to both consumer as well as business confidence. Pent-up demand on both investment and consumption will likely be unleashed in this scenario and put us on a path of a very robust recovery in 2021.” 

“We still need to see confirmation of the results but if we do, it is indeed very good news and it clearly puts upside risks to our growth forecasts. It also underpins risk assets as bankruptcies would go down and profits get a boost.”