Vaccine boosters boost the healthcare sector?

Key drivers of vaccine stocks:

·         Fast spreading of Delta variant vs dropping vaccine efficacy - Delta variant has led to a spike in covid cases globally. Despite the increase in vaccination rate, recent report indicates that the effectiveness of vaccines among US front-line workers declined to 66% after the Delta variant became dominant, vs 91% before it arose.

·         Similar results were shown from Israel, the country with over 60% of population fully vaccinated. The efficacy of vaccine dropped with Delta variant, but it was still highly effective against preventing hospitalization and severe illnesses. The efficacy for those fully vaccinated in Jan 21 was only 16% vs 75% for those vaccinated in Apr 21, implying booster shots may be required every 6 months.

·         Booster shots on the horizon - The US government is planning to start offering booster shots at least 6 months after the 2nd dose, rather than the 8-month gap they previously announced. Approval is expected this month. Furthermore, Germany, France and the UK announced that they would begin delivering boosters in September.

·         Full FDA approval - Pfizer becomes the first Covid vaccine that has gained full FDA approval recently. National poll showed that over 35% of unvaccinated adults in the US said that full FDA approval would address concerns about the vaccines’ safety and effectiveness, and hence, likely to accelerate the vaccination mandates in the coming months.