Which Vaccine Stock Should I Buy?

Which Vaccine Stock Should I Buy? The COVID-19 novel coronavirus caused the biggest viral pandemic we’ve seen in our lifetimes. There are nearly 200,000 cases in the U.S. alone, and the economic and health impact will be felt for generations.

This makes developing a coronavirus vaccine top priority in 2020, and over 170 research teams have already answered the call, with proposed antiviral treatments in a variety of forms, according to the World Health Organization (WHO).

Even the U.S. government is in on the action, investing $10.79 billion in potential vaccines via Operations Warp Speed. It begs the question – which vaccine stock should I buy?

Successfully curing COVID-19 has profit potential for the team behind it, with investors lining up to back a guaranteed win. However, there are no guarantees that any single vaccine will pass all three necessary phases of clinical trials to be approved for general use.

Even rushed to address the situation in real time, it could take up to 18 months before we know for sure about a treatment’s efficacy. However, investing in a variety of vaccine stocks gives you a diverse portfolio that reduces your overall risk exposure. Basically, do what the U.S. government did and bet on a variety of vaccines.

Here are four coronavirus vaccine stocks to consider.

Has Gilead Sciences 1.5 Million Vaccine Doses?

Gilead Sciences (NASDAQ:GILD) led the pack during the initial coronavirus outbreak, as remdesivir was far enough down the pipeline of clinical trials that the U.S. Food and Drug Administration enacted an Emergency Use Authorization to use it in COVID treatment.

In early April, the stock price soared upon the news that 1.5 million doses were in the final stages of production and could be donated to the U.S. government to combat the virus.

Remdesivir is a broad-spectrum antiviral the company developed prior to the current pandemic, and it already has a track record of combatting human immunodeficiency virus (HIV).

Unfortunately, the company’s second quarter 2020 financials didn’t look great, and the stock took a dip upon news that the treatments weren’t working as well as expected.

Gilead also faced harsh criticism for its pricing of the treatment at $2000-$3000, depending on the patient’s insurance situation. Because it has exclusive rights to manufacture the treatment, some are worried it may go the route of Daraprim, a life-saving drug that jumped in price from $13.50 to $750 overnight, landing Turing Pharmaceuticals CEO Martin Shkreli in hot water.

Still, the company has the only FDA-approved treatment so far (although the application for permanent approval is still pending), solid revenues for its current HIV medication, and an expanding roster of pharmaceutical developments to keep revenue coming in for stakeholders.

Moderna Clinical Trials Are Positive

Cambridge, Massachusetts-based Moderna (NASDQ:MRNA) wasn’t far behind Gilead in its vaccine development, losing it all the good and bad of being the frontrunner. Dubbed mRNA-1273, this potential vaccine developed in partnership with the National Institute of Allergy and Infectious Diseases (NIAID) entered Phase 3 clinical trials in July 2020.

It uses messenger ribonucleic acid (mRNA) to deliver an immunogen in the form of a prefusion stabilized spike protein of SARS-CoV-2 and the Trump Administration paid it $1.53 billion to secure full regulatory clearance before the end of January 2021.

This biotech company only recently went public in December 2018, but it already gained approximately 4x in value in that time. That far outperforms the S&P500 over the same period by a large margin, and a lot of it is tied to government money.

In addition to the research grant above, it was initially granted $955 million in a series of two payments from the Coalition for Epidemic Preparedness Innovations (CEPI). That’s $2.5 billion in free money at a time when small businesses were scrambling for a maximum $10 million PPP loan.

We won’t know until next year whether it fulfills its obligations and gets to keep all of the money, but it only has the final hurdle left to overcome. Should it fail to meet its deadline, it’ll only keep $1.2 billion of the $1.53 billion. Even then, it’s arguably worth the share price knowing it’ll close the year in the green with Uncle Sam footing the bill.

Novavax Clinical Trials Are Positive

Novavax (NASDAQ:NVAX) also has the support of Operation Warp Speed and CEPI, along with a $15 million grant from the Bill & Melinda Gates Foundation. This late-stage biotechnology company started Phase 1/2 clinical trials during the 2020 coronavirus outbreak, with positive results so far.

It’s reaching beyond U.S. shores to help those infected with COVID in places like South Africa and Japan using its NVX-CoV2373 vaccine, which contains coronavirus spike protein derivatives attached to microscopic particles that trigger your body’s immune response.

This helped the Maryland-based company create massive gains in 2020, starting the year at $4 per share and hitting highs of nearly $200 by August.

It’s not the first time in its 33-year history it experienced such a Tesla-like spike, and COVID-19 isn’t its first viral fight. In fact, it’s been developing vaccines for Ebola, Zika, influenza, and a variety of maternal immunizations in developing countries.

CEPI granted the company $388 million in 2020 to complete its clinical trials for the coronavirus vaccine, which is being manufactured by Emergent BioSolutions. It’s also getting $1.6 billion from Operation Warp Speed, totaling $2 billion in grants should it be successful by the deadlines.

The coronavirus vaccine isn’t even the most advanced research it has towards a potentially profitable product, as its NanoFlu vaccine is reaching into the biggest piece of the pie – the $4 billion and rising annual influenza vaccine market.

AstraZeneca Donated 9 Million Face Masks

AstraZeneca (NYSE:AZN) is a UK-based company that donated 9 million face masks to a variety of international health organizations fighting the coronavirus crisis in April 2020. It also partnered with GlaxoSmithKline on a COVID-19 testing facility and began clinical trials of Calquence, its proposed treatment.

By June, it was partnered with Oxford University and NIAID on Phase 3 testing, along with development of AZD1222. The company is making 100 million doses available to the UK’s national health agency and securing an $87 million deal to provide the vaccine to the U.S. market.

By August 2020, AztraZeneca stuck a $1.2 billion deal to provide 300 million vaccine doses to the U.S. market. Between Europe and North America, the company has a marketable product that’s close to proving efficacy and raking in profits. Unlike other companies on this list, its share price didn’t dramatically spike either, leaving plenty of room for growth opportunity and dividends.

Between each of these pharmaceutical and biotechnology companies, there are four great shots at finding a potential cure for COVID-19. By the end of January 2021, we expect to see the fruits of all these labors, and investors who are already on board will ride a wave of potential profits.

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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.