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3 Biotech Stocks to Buy on First Vaccine Approval Optimism

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Zacks Equity Research
·4 min read
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Keeping the hope for faster availability of vaccines alive, the month of December finally brought in some good news as the United Kingdom granted Pfizer PFE and its partner BioNTech’s mRNA-based vaccine candidate, BNT162b2, authorization for emergency use.

The stock markets have been rising lately, driven by positive developments on the coronavirus vaccine front in November. Leading stock market indices have been up in double-digit percentage points since October-end led by the tech-heavy Nasdaq.

Meanwhile, an advisory committee meeting has been scheduled by the FDA to discuss the emergency use authorization (“EUA”) application for Pfizer’s BNT162b2 on Dec 10. BNT162b2 achieved 95% efficacy rate in final analysis. Moderna is closely following the pharma giant as its EUA application is due to be discussed by an FDA advisory committee on Dec 17. The company is developing a mRNA-based coronavirus vaccine, mRNA-1273, that has demonstrated primary efficacy rate of 94.1% so far. The FDA should make its decisions soon after the meetings and the vaccines are expected to be launched in December, if approved.

Another frontrunner in the vaccine race, AstraZeneca, announced last month that its adeno-virus based vaccine candidate, AZD1222, achieved an average efficacy rate of 70% during the first interim analysis. Several other companies are developing COVID-19 vaccines in late-stage studies across the globe.

However, we note that an authorization does not guarantee the end of the pandemic any time soon. The vaccines need to be delivered to the several billion people across the globe, following their potential approvals/authorization in different countries. Vaccination of the majority of people will likely take months, if not years, due to several factors including logistics and manufacturing capacities. But still the initiation of vaccination will likely lead to normalization of daily life as well as economies toward mid-2021, creating demand across all sectors and industries.

Stocks to Consider

Here we will discuss three biotech companies that have the potential to ride the positive sentiment on the back of their promising pipeline or technologies and generate handsome returns for investors in the coming months. These stocks carry a Zacks Rank #2 (Buy), have witnessed positive estimate revisions in the past four weeks and risen at least 40% year to date.

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Aerpio Pharmaceuticals ARPO: This small biotech is focused on developing medicines for ocular diseases and diabetic complications. It is also developing treatment for acute respiratory distress syndrome (“ARDS”) associated with a novel strain of COVID-19 infection. The company is evaluating its pipeline candidate, razuprotafib, for the treatment of COVID-related ARDS in adult patients with critical COVID-19 in a phase II study. Data from this study is expected in the first half of 2021. A positive data will drive share prices higher.

The company’s loss estimates for 2021 have narrowed from 63 cents per share to 57 cents over the past 30 days. The stock has surged 177.5% so far this year.

 

TRACON Pharmaceuticals TCON: The company is evaluating its lead pipeline candidate, envafolimab, for treating soft tissue sarcoma, in a pivotal phase II study. Interim data is expected in 2021, followed by final data in 2022. It has two other early-stage oncology candidates in its pipeline. Oncology is an attractive domain in the biotech sector and with possibility of containing COVID-19 with vaccine approvals, the company will likely be able to continue its studies without disruptions. Positive data readout will lead share price higher.

Loss estimates for the company have narrowed from $1.47 per share to $1.35 per share for 2021 over the past 30 days. Shares have skyrocketed 299.6% year to date.

Repligen Corporation RGEN: The company develops and commercializes highly innovated bioprocessing technologies that are used to develop novel treatments including monoclonal antibodies, recombinant proteins, vaccines and gene therapies by several pharma/biotech companies. Normal life following successful vaccinations will led to disruption-free progress of clinical studies, which will likely fuel demand for Repligen’s products.

Shares of this company are up 102.2% so far this year. The company’s earnings estimates for 2021 moved up from $1.42 per share to $1.66 over the past 30 days.

These Stocks Are Poised to Soar Past the Pandemic

The COVID-19 outbreak has shifted consumer behavior dramatically, and a handful of high-tech companies have stepped up to keep America running. Right now, investors in these companies have a shot at serious profits. For example, Zoom jumped 108.5% in less than 4 months while most other stocks were sinking.

Our research shows that 5 cutting-edge stocks could skyrocket from the exponential increase in demand for “stay at home” technologies. This could be one of the biggest buying opportunities of this decade, especially for those who get in early.

See the 5 high-tech stocks now>>


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Pfizer Inc. (PFE) : Free Stock Analysis Report
 
Repligen Corporation (RGEN) : Free Stock Analysis Report
 
TRACON Pharmaceuticals, Inc. (TCON) : Free Stock Analysis Report
 
Aerpio Pharmaceuticals, Inc. (ARPO) : Free Stock Analysis Report
 
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