Valneva shares soar after vaccine approval! Should I buy?

Valneva’s shares jumped on Thursday morning after the British government approved its Covid-19 shot. Could this stock be right for my portfolio?

| More on:

The content of this article was relevant at the time of publishing. Circumstances change continuously and caution should therefore be exercised when relying upon any content contained within this article.

Syringe and vial on blue background

Image source: Getty Images

When investing, your capital is at risk. The value of your investments can go down as well as up and you may get back less than you put in.

Read More

The content of this article is provided for information purposes only and is not intended to be, nor does it constitute, any form of personal advice. Investments in a currency other than sterling are exposed to currency exchange risk. Currency exchange rates are constantly changing, which may affect the value of the investment in sterling terms. You could lose money in sterling even if the stock price rises in the currency of origin. Stocks listed on overseas exchanges may be subject to additional dealing and exchange rate charges, and may have other tax implications, and may not provide the same, or any, regulatory protection as in the UK.

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More.

Valneva (FRA:AYJ) shares soared on Thursday morning following a breakthrough for the company’s Covid-19 vaccine. Euronext temporarily halted trading in Valneva’s shares that were sharply up. 

What behind today’s jump?

On Thursday, Britain approved Valneva’s Covid-19 vaccine, becoming the first country to give the green light to the French firm’s coronavirus shot. The vaccine — which is now Britain’s sixth — is easier to store than other products in the market and involves a process widely used in making flu and polio vaccines.

It is also the first whole-virus inactivated Covid-19 vaccine to gain approval in the UK. The virus is grown in a lab and is then made completely inactive. As such, it cannot infect cells or replicate in the body but will trigger an immune response.

The UK is one of the largest purchasers of vaccines to fight Covid-19. Despite completing multiple rounds of mass rollouts already, it still represents a sizeable market for the French biotech firm.

However, relations between the firm and the British government have been mixed. The UK government reached a supply deal with Valneva early on in the pandemic before scrapping the €1.4bn agreement in September. Valneva had even agreed to make its jabs in Scotland, which was seen as a big win for the British government.

Should I buy?

There’s been considerably volatility among some pharma and biotech firms involved in the development of Covid-19 vaccines. US-based Novavax was possibly one of the most volatile, with its share price going from under $5 a share to nearly $300. It has subsequently fallen to $62 at the time of writing.

Companies that got their vaccine ready and approved early earned billions. But it looks likely that Valneva has missed the boat for the big vaccine campaigns. Having said that, it is always possible that a new, more dangerous wave of Covid-19 may trigger large-scale rollouts. Currently, beyond orders already received from the EU and Bahrain, the exact revenue profile for Valneva’s vaccine is unclear.

It does have one thing in its favour though. It is seen as having the potential to win over people who are wary of the mRNA vaccines developed by Pfizer and Moderna.

The share price at the time of writing is €17.32, that’s up around 14% today, but up over 200% since 2020. Valneva had previously reached highs of near €30 a share in 2021.

So would I buy? For me, there’s just too much risk with investing in a stock that’s valuation is so heavily linked to sale of its Covid-19 vaccine. Of course, it is pretty hard to guess the future of the pandemic. And I am certainly not the right person to make epidemiological forecasts. But that is why I won’t be buying Valneva.

Should you invest, the value of your investment may rise or fall and your capital is at risk. Before investing, your individual circumstances should be assessed. Consider taking independent financial advice.

James has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

More on Investing Articles

Investing Articles

Could the JD Sports Fashion share price double in the next five years?

The JD Sports Fashion share price has nearly halved in the past five years. Our writer thinks a proven business…

Read more »

Bus waiting in front of the London Stock Exchange on a sunny day.
Investing Articles

If interest rate cuts are coming, I think these UK growth stocks could soar!

Falling interest could be great news for UK growth stocks, especially those that have been under the cosh recently. Paul…

Read more »

Investing Articles

Are these the best stocks to buy on the FTSE right now?

With the UK stock market on the way to hitting new highs, this Fool is considering which are the best…

Read more »

Petrochemical engineer working at night with digital tablet inside oil and gas refinery plant
Investing Articles

Can the Centrica dividend keep on growing?

Christopher Ruane considers some positive factors that might see continued growth in the Centrica dividend -- as well as some…

Read more »

Smiling family of four enjoying breakfast at sunrise while camping
Investing Articles

How I’d turn my £12,000 of savings into passive income of £1,275 a month

This Fool is considering a strategy that he believes can help him achieve a stable passive income stream with a…

Read more »

Person holding magnifying glass over important document, reading the small print
Investing Articles

2 top FTSE 250 investment trusts trading at attractive discounts!

This pair of discounted FTSE 250 trusts appear to be on sale right now. Here's why I'd scoop up their…

Read more »

Smiling young man sitting in cafe and checking messages, with his laptop in front of him.
Investing Articles

3 things that could push the Lloyds share price to 60p and beyond

The Lloyds share price has broken through 50p. Next step 60p? And then what? Here are some thoughts on what…

Read more »

Young female business analyst looking at a graph chart while working from home
Investing Articles

£1,000 in Rolls-Royce shares a year ago would be worth this much now

Rolls-Royce shares have posted one of the best stock market gains of the past 12 months. But what might the…

Read more »