SARS-CoV-2 is believed to have caused the deadliest pandemic ever in the past century. The coronavirus has infected more than 76 million people and has caused more than 1.7 million deaths worldwide, per the World Health Organization website as of Dec 24. Stock markets across the globe tanked significantly during March on the coronavirus news, wiping out several billions of dollars of investors’ money.
However, we have seen a steady recovery in majority of the stock market indices worldwide and many of them are trading past their highest levels recorded before the crash. The strong rally in stock markets across the globe has been fueled by the progress of coronavirus vaccines development. The availability of vaccines is expected to accelerate normalization of world economy. Several stocks have witnessed a multi-fold increase.
Fundamentally, economies across the globe have not reached levels seen in the pre-COVID-19 era. Several sectors like Airlines and Restaurants have been worst hit due to the pandemic and are still reeling under pressure. Several companies in the pharma/biotech sector have also felt the heat with disruption in clinical studies leading to delay in data readout or discontinuation of studies. Sales of physician-administered drugs were hit due to lockdowns imposed by governments in different countries. However, some biotech stocks have more than doubled during this period, especially those focusing on developing a coronavirus vaccine. We note that two vaccines, from Pfizer/BioNTech and Moderna, received emergency use approval from the FDA earlier this month, boosting hopes of a normal world in a year or two. However, the new strain of coronavirus found in the United Kingdom is again raising some concerns.
Stocks to Watch
Here we discuss six biotech/drug stocks that have managed to perform well so far this year backed by their encouraging progress in developing a coronavirus vaccine.
Novavax’s pivotal phase III study on its COVID-19 vaccine candidate, NVX-CoV2373, in the United States and Mexico is expected to begin in the coming weeks. Meanwhile, a phase III study on NVX-CoV2373 in the United Kingdom and the phase IIb efficacy study in South Africa have completed full enrollment with more than 20,000 participants dosed in these studies. Interim data from the U.K. study is expected in the first quarter of 2020.
The candidate demonstrated strong antibody data in phase I and it is quite likely that the efficacy and safety data from the phase II/III studies will be positive. Novavax is positioned to become a key player in the COVID-19 vaccine space.
The stock has risen 3107.3% this year so far compared with 10.2% increase for the industry.
Vaxart is developing an oral vaccine for COVID-19 in a phase I study that can be administered by tablet rather than by injection. The oral tablet COVID-19 vaccine candidate, VXA-CoV2-1, may offer enormous logistical advantages as it can be conveniently distributed and administered without the need for cold-chain storage and distribution. Pre-clinical data on the tablet vaccine has indicated that VXA-CoV2-1 activates both systemic and mucosal immunity, a broader immune response compared to injectable vaccines.
The stock is up 1902.8% this year compared with 3.7% increase for the industry.
Inovio Pharmaceuticals INO
The company joined the coronavirus vaccine development race early in March. Although the company’s phase II/III coronavirus vaccine study was paused due to partial hold imposed by the FDA in September, the study has now resumed. The company is developing a DNA vaccine candidate, INO-4800, for battling SARS-CoV-2. Moreover, the U.S. Department of Defense will be funding both phases of the study, suggesting no funding related mishap going forward. The company is also planning to develop DNA-encoded monoclonal antibody candidates as potential treatment for COVID-19 with funding from several U.S. federal agencies including Department of Defense.
The company’s shares have gained 205.2% so far this year compared with the industry’s increase of 10.2%.
Translate Bio TBIO
The company has a strong partner in Sanofi. Last month, the company and its partner announced promising pre-clinical data on their coronavirus vaccine candidate, MRT5500. A phase I/II study is expected to start in the first quarter of 2021. Positive study data readout will push the share prices higher.
Translate Bio’s shares have gained 196.7% so far this year compared with 3.7% increase for the industry.
The company is one of the early contenders to join the coronavirus vaccine development race. It started clinical development of its mRNA-based vaccine, mRNA-1273, in March. The company’s vaccine became the second to get emergency use approval from the FDA earlier this month. The vaccine achieved vaccine efficacy rate of 94.1% during the primary efficacy analysis of the phase III study evaluating the candiadte. The vaccine is also under review in Europe and several other countries for conditional authorization. Supply agreements worth millions of doses are also in place with different countries.
Moderna’s shares have gained 566.4% so far this year compared with the industry’s increase of 10.2%.
The company along with its partner Pfizer brought the world’s first approved coronavirus vaccine for emergency use. The mRNA-based vaccine, BNT162b2 is now approved for emergency/temporary/conditional use in more than 40 countries including the United States, 27 EU member countries, United Kingdom and Canada. BioNTech and Pfizer have joined the race late in May but their accelerated development progress fueled a rally in BioNTech stock.
BioNTech’s shares have gained 195.4% so far this year compared with the industry’s increase of 10.2%.
Zacks Top 10 Stocks for 2021
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Moderna, Inc. (MRNA) : Free Stock Analysis Report
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