Investing

Cramer: Moderna sets 'pace of overoptimism' on how quickly a coronavirus vaccine could be ready

Key Points
  • CNBC's Jim Cramer urged investors Monday to remain cautious about the length of time it takes to develop a successful coronavirus vaccine.
  • He said that Massachusetts-based biotech firm Moderna may be painting too rosy of a picture. 
  • "It's going to take a long time. I don't know if people are really ready for how long it's going to take," Cramer said on "Squawk on the Street."
VIDEO3:1803:18
Jim Cramer on Moderna executives stock sales, vaccine competitors

CNBC's Jim Cramer urged investors Monday to remain cautious about the length of time it takes to develop a successful coronavirus vaccine, saying that Massachusetts-based biotech firm Moderna may be painting too rosy of a picture. 

"It's not a simple case. You don't just say, 'Hey, look at this. These people didn't get Covid over a couple weeks.' It's going to take a long time. I don't know if people are really ready for how long it's going to take," Cramer said.

Cramer's comments on "Squawk on the Street" came on the same day Moderna began Phase 3 study of its experimental vaccine to prevent Covid-19. This critical stage will involve 30,000 patients receiving the vaccine candidate, which has been developed alongside the National Institutes of Health.

Moderna CEO Stephane Bancel said earlier Monday on CNBC's "Squawk Box" that late-stage results could be ready by October. But he cautioned that was a "really optimistic" scenario. He added, "It could be November. Again, at this stage, it's impossible for us to know precisely. It will depend on the event rate, the attack rate of infection."

Cramer took issue with Bancel's comments.

"I also don't like the idea that you can put any time frame on it. October optimistic? Then don't talk about October. Just say, 'Listen, we hope to have something by the first quarter,'" Cramer said.

"Moderna has been setting the pace of overoptimism," the "Mad Money" host added.

White House coronavirus advisor Dr. Anthony Fauci said later Monday that November would likely be the earliest time frame to know if Moderna's coronavirus vaccine works. He was speaking with reporters on a conference call alongside NIH Director Dr. Francis Collins. Fauci heads the National Institute of Allergy and Infectious Diseases, which is part of NIH, an agency that rolls up to the federal government's Department of Health and Human Services.

Projecting too much confidence about the development timeline could impair certain aspects of the U.S. coronavirus response, Cramer said. In particular, he said it could cause a sense of complacency in Washington, where Congress is currently considering another coronavirus relief package

Cramer said, "Don't set us up because ... people are going to say in the House and the Senate, 'Look we don't need to do another program. If we're going to get a vaccine by October, then let's just let the dice roll. Let's have the masks and social distancing play it out,' and I think that's not an optimum situation."

The race to develop a vaccine for the coronavirus, which has infected nearly 16.3 million people worldwide and more than 4.2 million in the U.S., is intensely followed by those on Wall Street to Main Street. However, creating a successful vaccine for widespread deployment is a complicated process that can sometimes take years.

The Trump administration has launched a program, called Operation Warp Speed, to accelerate development of a vaccine and potential treatments for Covid-19. It's already distributed billions of dollars to companies in the fight. 

Moderna on Sunday said it received $472 million from the U.S. government to aid in its vaccine development, including the Phase 3 trial. In April, the firm received $483 million. Moderna was the first company in the U.S. to enter human trials for its Covid-19 vaccine candidate in March, with 45 participants in the Seattle area.

Some in the pharmaceutical industry have raised concerns about the pressures to develop a coronavirus vaccine. In an interview published earlier this month, Merck CEO Kenneth Frazier said people who are saying there could be ready-to-go vaccine by the end of this year are doing a "grave disservice to the public." 

"If you're going to use a vaccine on billions of people, you better know what that vaccine does," Frazier said in an interview with Harvard Business School

Cramer said he believes Johnson & Johnson has adopted the appropriate public-facing approach to its Covid-19 vaccine development process. J&J, which expects to begin its late-stage trial in September, has said it could produce 600 million to 900 million doses by April if the vaccine works well.

"I do think in terms of disclosure, J&J is getting some very good advice," Cramer said. "I just don't want false hopes."

Disclosure: Cramer's charitable trust owns shares of Johnson & Johnson. 

VIDEO4:0604:06
Moderna CEO Stephane Bancel on kick off of phase three Covid-19 vaccine trial