Is CureVac Stock a Buy?

Is CureVac Stock a Buy? Germany is known for its engineering prowess, so it’s no surprise that its leading COVID-19 vaccine manufacturer is gaining attention here in the United States.

In fact, White House officials met with CureVac BV (NASDAQ:CVAC) executives to discuss how effective its mRNA-based coronavirus vaccine could be. The surrounding buzz led the company to a $213 million IPO in the U.S. on August 14, 2020, leaving many investors wondering – is CureVac stock a Buy?

It’s certainly in the right place at the right time, and the IPO was conservatively priced at $16/share before instantly gaining over 200% to climb above $50 by the end of its first week.

It also has the backing of SAP founder Dietmar Hopp (who owns almost half the company), the German government, The Bill & Melinda Gates Foundation, GlaxoSmithKline, and more. Of course, it’s not the only firm pursuing a fast-tracked coronavirus vaccine, and it’s not yet profitable. Let’s discuss what CureVac does and how it’ll fare moving forward.

Has CureVac A Treatment For SARS-CoV-2?

CureVac is a German biopharmaceutical company focused on messenger RNA research. This is one of the more promising vaccination solutions for complicated viral infections, like SARS-CoV-2, acquired immunodeficiency syndrome (AIDS), smallpox, MERS-CoV, polio, rabies, and Ebola.

The company rushed to file the necessary documentation for Phase 1 clinical trial approval of its mRNA-based vaccine in Germany and Belgium in the aftermath of the covid-19 outbreak.

The company had a head start working with the Middle East Respiratory Syndrome (MERS) coronavirus strain in 2017, so it was well positioned to assist in the region. Its early-stage clinical trials began in June and is testing efficacy at a much smaller microdose (2 to 6 micrograms) than competitors.

It also has a pipeline that includes experimental mRNA treatments for non-small lung cancer, adenoid cystic carcinoma, advanced melanoma, and more.

And it is a buzzy stock since its stateside IPO.

Is CureVac Stock a Buy?

CureVac made headlines for gaining nearly 250% on its first day of trading, jumping from $16 per share in the IPO to $44 by the end of the trading day. It since hovered around $60 for the rest of August, largely held there by the possibility of it supplying COVID-19 vaccines across the European Union.

The company is in talks to supply 405 million doses of the vaccine to the European Commission for their choice of distribution. While nothing was formally signed by the end of August, the stock’s value clearly takes this into consideration.

Should the vaccine prove stable and effective in combating the novel coronavirus, CureVac will have first-mover advantage across the EU. The IPO funds are being used to further vaccine development, which is expected to be released to the public by summer 2021 for a price of $10-15 per treatment, according to NASDAQ analysts.

Of course, CureVac isn’t the only potential vaccine being researched in Europe and beyond.

Risks of Buying CureVac Stock

Like any company working with the heavily regulated healthcare and pharmaceutical industries, there are risks involved with investing in a company trying to save the world.

Its positive history of clinical approvals could dry up, and only regulator-approved medical treatments have any chance of generating revenue. We’re unlikely to eradicate any of the viruses listed in this article or cancer, and that means treatments for them will always be valuable.

But that doesn’t mean CureVac is entitled to be the provider. At the end of the day, we all want to live long and healthy lives. Any treatment that can potentially save lives without creating more problems and side effects will generate revenue. And the penalties for failure are swift, possibly leaving investors empty handed.

There’s plenty of competition in the arena of COVID-19 alone, and it’s more than just mRNA treatments being proposed. This means CureVac could lose out to the competition.

CureVac Vs Moderna: Which Is Best?

The closest competition to CureVac is Moderna Inc’s (NASDAQ:MRNA) mRNA coronavirus vaccine, which is one of the leading candidates being touted by this country’s National Institutes of Health.

This company’s proposed solution is already in Phase 3 clinical trials, although it’s expected to be more costly than CureVac’s treatment. In addition, Pfizer, BioNTech, and other companies also have skin in the game, and some are testing other routes for a treatment.

Having more solutions is a good thing for consumers, as this is a global pandemic that’s affecting everyone. If you or a loved one is infected, you surely want a choice of the best treatments for the cheapest possible price.

In the case of life-saving treatments for the coronavirus, cancer, or any other fatal disease, we all ultimately win when everyone has affordable access to the treatment.

CureVac is much smaller if you’re doing a one-to-one comparison, with just under $1 billion in cash assets available versus $3.1 billion held by Moderna.

However, several red flags started to show when the company’s executives sold off their shares in the leadup to its clinical approvals. Regulatory approval is what ultimately matters in this industry, and so far nobody has it.

Is CureVac Stock a Buy? The Bottom Line

CureVac is one of many companies working on a viable coronavirus vaccine. Its mRNA approach is seen as a strong contender, although a much larger competitor in Moderna is also creating a similar treatment. While they have similar approaches, both companies are serving different markets (Moderna in the U.S. and CureVac in the E.U.). There’s room for them both, but what matters is being approved by their regions’ respective regulators.

Most analysts have CureVac listed as a Buy heading into 2021, and it’s hard to disagree. It has a solid track record in clinical trials and has a large enough pipeline to survive even if its COVID-19 treatment fails. If it succeeds, it’ll open a fast-flowing revenue stream that’s sure to last through 2030 and beyond.

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The author has no position in any of the stocks mentioned. Financhill has a disclosure policy. This post may contain affiliate links or links from our sponsors.