FDA Approval of Pfizer COVID-19 Vaccine Boosts Movie Theater Stocks

It was a good day for publicly-traded movie theater stocks. Shares of AMC Entertainment, Cinemark (parent of Regal Cinemas) and Imax Aug. 23 at market closed up  almost 7%, respectively, as investors welcomed the U.S. Food and Drug Administration officially approving the Pfizer coronavirus vaccine.

The vaccine, which has been known as the Pfizer-BioNTech COVID-19 Vaccine, will now be marketed as Comirnaty (koe-mir’-na-tee), for the prevention of COVID-19 disease in individuals 16 years of age and older, according to the FDA. The vaccine also continues to be available under emergency use authorization, including for individuals 12 through 15 years of age, and for the administration of a third dose in certain immunocompromised individuals.

A recent Kaiser Family Foundation survey found that 31% of respondents cited FDA approval key to getting a vaccine. Government approval will also encourage private businesses to mandate vaccinations among their employees.

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The approval is a huge win for the theatrical industry, which has been trying to woo apprehensive moviegoers back into cinemas. The past weekend was the lowest domestic box office in two months, generating less than $60 million in ticket sales.

“While millions of people have already safely received COVID-19 vaccines, we recognize that for some, the FDA approval of a vaccine may now instill additional confidence to get vaccinated,” Acting FDA Commissioner Janet Woodcock, M.D., said in a statement. “Today’s milestone puts us one step closer to altering the course of this pandemic in the U.S.”

AMC CEO Adam Aron, earlier this month on the exhibitor’s fiscal call, welcomed increased vaccination rates among consumers — a trend that mirrors the world’s largest movie exhibitor’s ongoing efforts to sanitize theaters, ventilation and air filtration systems, in addition to ticketless movie screenings.

“Vaccination increasing is very important for AMC and for the movie theater industry generally,” Aron said on the conference call.

Cinema Stocks Skyrocket; SVOD Fall on Vaccine News

There could be light at the end of the tunnel for beleaguered movie theaters following positive news regarding coronavirus vaccine trials from Pfizer and BioNTech.

Citing the “first interim efficacy analysis” on its “Phase 2/3” clinical trial, Pfizer and BioNTech found 90% effectiveness seven days after the second dose of vaccine “BNT162b2” in preventing infection in test subjects who had never tested positive for coronavirus. The companies said they plan to review the results with regulatory authorities worldwide, including the World Health Organization.

“I would say it’s a historical moment,” Kathrin Jansen, head of vaccine research and development at Pfizer, told the Washington Post. “Something like this has never happened before. Hearing that at the interim analysis we are over 90 percent effective — it was almost stunning to hear.”

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“The results are really quite good, I mean extraordinary,” added Anthony S. Fauci, director of the National Institute of Allergy and Infectious Diseases, who thinks a second vaccine could be produced by biotech firm Moderna, based on similar technology in use.

Dr. Anthony Fauci

The news caused a spark of excitement on Wall Street, with investors rewarding movie theaters and biotech/pharmaceutical companies. Theaters, including most of Hollywood, have been operating under strict pandemic guidelines, resulting in fewer productions and pushing back major tentpole movie releases until 2021.

That, in turn, has resulted in fewer new-release home entertainment titles distributed via packaged media and digital channels.

AMC Entertainment, the world’s largest exhibitor, saw its stock skyrocket nearly 73% in early morning trading after months of shuttered screens and dwindling finances.

The No. 2 and No. 3 theatrical chains — Regal Cinemas and Cinemark — saw their parent stock increase 39% and 42%, respectively. Imax is up more than 27%; Marcus (+17%); Reading International (+13.9%); National CineMedia (+21%) and Theater Landlord EPR Properties (+27).

Meanwhile, shares of Netflix, Roku and other stay-at-home sources of entertainment fell in early trading. Netflix was down 7%, while Roku plummeted 12%. Video conferencing favorite Zoom saw share prices fall 19%, while fitness brand Peloton’s stock was down 24%.