Energy Prospectus

If the vaccine works, it will be a BIG DEAL for oil prices.

From Bank of America Equity Research

Today BNTX and partner PFE reported positive interim results from its COVID-19 vaccine BNT162b2 ph 3 study. At the interim analysis conducted by the Independent Data Monitoring Committee ( DMC) on 94 confirmed evaluable cases, BNT162b2 vaccine was more than 90% effective against COVID infection at seven days after the second dose with no serious safety concerns. PFE/BNTX noted that the enrolled subjects in the study were diverse with 42% global and 30% US subjects with racially and ethnically diverse bkg.
BNT162b2 is planning to file for Emergency Use Authorization (EUA) approval pending accumulation of additional safety data with 50% of subjects reaching 2 mos. after the second dose expected in the third week of November.
The study is continuing to enroll (~43.5K enrolled to-date) and the final analysis will be conducted when 164 confirmed cases have been reached. BNTX/PFE indicated the manufacturing goals of up to 50mn doses in 2020 and up to 1.3bn doses in 2021.
We positively view the topline results from the interim read, as the efficacy surpasses our expectations of 60%. We believe the >90% efficacy sets a high bar for potential competitors to enter
and clears the path for BNT162b2 to be the first COVID vaccine approved in the US. In our DCF-based model, we increase our likelihood of success to 80% (pre v. 50%). We now est. ‘ 162b2 risk -adj. peak sales of $3.7bn to BNTX in 2021 under our assumptions of 40% initial mkt share and 35% in outer year s. We expect to refine our assumptions as we await updates on its efficacy/safety profile vs competitors (e.g. MR NA, AZN/Oxford, JNJ). We reit. our Buy rating on BNTX shares with a new $ 128 PO ( from $100), as we await updates on the timing of the EUA filing in US .

More color on the phase 3 trial
The ph 3 trial in up to 44K subjects globally is evaluating a two dose-regimen of BNT162b2 at 30 μg with the second booster dosed 21 days after the first dose. The primary efficacy endpoint is based on COVID infection based on confirmed nucleic acid amplification tests (NAAT). We await more color on the safety profile , durability of protection and its decision of potential unblinding of placebo near term, and updates on the logistical distribution strategy to the point of vaccination.

More from B of A:

> A shot in the arm. Today’s news that Pfizer and BioNTech’s Covid-19 vaccine was more than 90% effective in the first interim efficacy analysis is super-positive. A possible timeline suggests roll -out for emergency use before the end of the year and broadening out through the first half of next year. That should be very supportive for confidence. If the US Covid situation continues to deteriorate at least it will be comforting that the situation has a timeline.

> Companies – even in directly impaired sectors - can now start planning their re-emergence. Moreover that means IG-rated industrial companies no longer need to hold onto the ~$450bn war chest of cash built this year to fend off negative implications of Covid-19. This is why we expect light issuance for the remainder of the year and well into 2021. Our view is further that many companies will take out exiting bonds with cash via calls, tenders and maturities. Strong inflows and now a lack of bonds and we have the environment consistent with our 110bps IG spread
target and then testing the tight end of the 90-130bps range.

> Chasing Corona out of town, redux. The number of people hospitalized with Covid-19 in the US has risen to 56,768, or 95% or the peak earlier in the year. But to reiterate a point we make frequently – not anywhere close to hospitals filling up.