Coronavirus update: Moderna launches booster study for South African strain, Merck pulls out of vaccine race - Yahoo Finance

Moderna (MRNA) announced its COVID-19 vaccine was effective against the virus strain originating in the U.K. (B.1.1.7), but was less effective against the variant originating in South Africa ( B.1.351). As a result, the company is launching a phase 1 trial of a variant of its vaccine to test against the South Africa variant.

[Read more: Moderna shares surge as it says it is working on new vaccine against South African variant]

Moderna joins Pfizer (PFE) and BioNTech (BNTX), which announced last week that their vaccine was effective against the U.K. variant. But it has not yet specified studies on the South African strain— which has not yet been detected in the U.S.

“No significant impact on neutralization against the B.1.1.7 (UK) variant was detected in either case, however reduced neutralization was measured against the mutations present in B.1.351 (South Africa),” according to the study.

The news points to what many feared from the start— that the vaccine will only provide temporary protection. The company had also previously announced an intention to study a general booster shot against the virus, as many experts expect it will become a seasonal issue much like the flu.

“We haven’t been overly concerned about new SARS-CoV-2 variants’ ability to evade vaccines until now,” according to Raymond James analyst Steven Seedhouse. “We have to assume at this point COVID is endemic and vaccines will be seasonal going forward, even if the pandemic is ultimately fully controlled, simply out of caution to prevent re-emergence,” he added.

Teacher Lisa Egan is vaccinated with the Moderna coronavirus vaccine at a clinic organized by New York City's Department of Health, Monday, Jan. 11, 2021. "I feel so great, so lucky," she said. "I've been teaching remotely. I'm hoping now I can go back to the classroom." Monday was the first day that people over 75 and essential workers — including police officers, firefighters, and teachers — were allowed to receive the vaccines in New York. (AP Photo/Mark Lennihan)

But the South African strain is cause for a different concern.

In a statement, Moderna said the lower effectiveness against the South African strain, “May suggest a potential risk of earlier waning of immunity to the new B.1.351 strains.”

While the South African strain has not yet been detected in the U.S., its ability to spread is high, according to Dr. Anthony Fauci and other experts.

So, while the vaccines are effective against the U.K. strain, vaccinations still comprise a small portion of the total population, making the threat of a dominant new strain by March a concern, per the CDC.

Other vaccine companies, meanwhile, continue to pursue COVID-19 vaccines. Johnson & Johnson (JNJ) is expected to have results by the end of the month. It’s one-shot vaccine could alleviate current two-dose pressures on vaccine distribution in the U.S., as well as holds hope for a speedier reopening of the economy.

A recent Evercore ISI survey revealed that investors expect “sustained rotation into reopening stocks” if J&J’s vaccine proves to be more than 80% effective, according to an analyst note Monday. By comparison both Moderna and Pfizer/BioNTech proved more than 94% effective.

One major vaccine company, however, has dropped out of the race. Merck (MRK) announced Monday its two vaccine candidates showed low immune responses and it will instead focus its efforts on vaccine treatments.

Merck was the first company to have a vaccine approved against Ebola, and the vaccine is currently being stockpiled by the World Health Organization.

Meanwhile, the country continues to struggle with vaccine distribution, a problem that is being exacerbated by states’ willingness to reopen, according to Dr. Arthur Caplan, a top vaccine bioethicist and professor at NYU Langone.

“We are not paying attention to a the potential of a very dangerous threat,” Caplan told Yahoo Finance Monday.

With some states allowing restaurants to reopen with limited seating and sports leagues bringing back fans, Caplan says the U.S. “is not well-prepared for the new strain.”

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