Vaccine makers looking to to spend, spend, spend after massive Covid windfall

While all the focus has been on the boom which Covid-19 brought to the tech sector, some other industries also benefitted massively from the pandemic. These rare birds are now searching for acquisitions to ensure their "once in an epoch opportunity" (to quote Pfizer's CEO) is turned to permanent advantage. 

Shipping companies have boomed as a result of the unprecedented global lockdown, with the cost of transporting containers going through the proverbial roof. For instance, the share price of JSE and Nasdaq-listed Grindrod Shipping is up five-fold since March 2020. Swollen bank balances have pushed shipping companies into takeover mode, with many even venturing outside their traditional circle of competence.  

A more obvious sector to benefit is Big Pharma. Vaccine-maker Pfizer's share price has more than doubled since the pandemic began, and the drug maker's revenue is set to pass a new barrier of $100bn this year (click here to read the story). Like the shippers, Big Pharma is also hunting for places to invest the windfall. 

The big challenge for these winners - and their shareholders - will be resisting the temptation to overpay. Mining companies have taken over a decade to digest consequences of profilagacy that followed the commodity boom to May 2008. The pandemic's nouveau riche would do well to study that experience. That's unlikely, though. Because, like the rest of us, they're only human.       

First published in BizNewson 10 February 2022

By Alec Hogg is the Founder and Editor at BizNews.