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Most efficacious, safest COIVD-19 vaccine ‘is going to be the winner’: Strategist

Jefferies Healthcare Equity Strategy Jared Holz joins Yahoo Finance’s Kristin Myers to break down the latest on coronavirus vaccine developments.

Video Transcript

KRISTIN MYERS: They, of course, had a miss on both top and bottom lines. So let's chat this more now with Jared Holz, Jefferies Equity-- Jefferies Healthcare Equity Strategy. Thanks so much for joining us today, Jared.

Now, you've called vaccine stocks in the past the new weed stocks. There's obviously been a lot of enthusiasm around pot that did not bear out. Wondering if your estimation around vaccine stocks has changed at all, especially as we keep hearing from folks like the president himself, insisting that a vaccine is absolutely imminent?

JARED HOLZ: Thanks for having me. I really haven't changed my stance at all. I think the thesis remains. There-- there are too many companies vying for essentially the same market. We don't know how long this market is going to exist. We don't really know the receptivity to patients or, you know, that society is going to have. So I feel like, you know, another year or two years go by and all these vaccine stocks that we're fixated on, we're obsessed with, are just going to fall by the wayside, and we're just-- we're going to be talking about something else.

KRISTIN MYERS: When do you think-- and I know that we've been hearing, listen, we're going to have a vaccine by the election, and we'll hear we'll have one by Christmas, by the New Year. When do you think, however, that some of that enthusiasm around vaccine stocks actually might bear out? Is it a year or two? Or do you think that we might actually have Moderna, or Pfizer, or one of these other companies, perhaps even an upstart, not even one of the major companies, saying, hey, look, guys, we actually have a vaccine, and everyone else will say, aha, I knew I was smart to invest in some of these companies?

JARED HOLZ: Yeah, totally. I mean, the timing could be any day. I mean, Pfizer today said that within a week, they could unveil the phase III, at least the interim results from the phase III. Moderna's on the record saying November. So like, who knows whether that's November 1 or Thanksgiving? We have no idea.

December could be a date where you start to get some data from J&J and AstraZeneca, and that's going to bleed into 2021. So I have no idea when we're going to get these data sets. They're event-driven trials, which means that, you know, enough patients have to actually come down with coronavirus symptoms or actually be tested positive.

So it's really no one's-- it's everyone's best guess as to when this is going to happen. I don't really know what the significance is going to be. I think the significance is really on the broader market. If one of these vaccines work, I think the broader view is going to be everything's fine. Let's go out and forget this even happened. Everyone's protected.

KRISTIN MYERS: All right, well, let's talk about Eli Lilly specifically. Like, I mentioned, they had a miss on their earnings, and they also ended their clinical trial after their drug showed no marked improvement in the participants of that trial. Now, this is a two-part question for you here. Their CEO is saying, hey, look, there's actually still benefits to their drug. I don't know if that's necessarily true.

And so I might have some skepticism there. So specifically when it comes to Eli Lilly, what can investors really hang their hat on when it comes to that company going forward? And secondly, as we had mentioned, right, pot stocks really had a lot of enthusiasm that didn't necessarily bear out. Do you think that we're going to hear a lot more of those headlines that, frankly, a clinical trial had to end, no results, no good results anyway, going forward from a lot of these companies that, frankly, so many people have so much enthusiasm over?

JARED HOLZ: Well, I wouldn't really call Eli Lilly one of the pot stocks that I was referring to. I mean, they're a little bit more-- obviously a little bit more credible and have a lot more going on. The antibody program out of Eli Lilly, I feel like it is definitely suspect. I mean, they're-- they're talking around having multiple antibody regimens and different assets that are in development, that if they put them together they feel like they're going to come up with some sort of program that elicits excitement and some sort of, like, clinical benefit.

We haven't seen that yet. You can't really discredit a company like Eli Lilly that they will eventually have something decent. But for now, I think the Regeneron anybody program is deemed to be, by most investors, as the better program, unless or until Eli Lilly gets their act together. So I'm not discounting it or writing it down completely, but they have a lot to prove here.

KRISTIN MYERS: Do you think we'll hear a lot more flops going forward, even from some of these other-- I mean, I know you're saying they're reputable, not to imply that a company like Eli Lilly isn't. But do you think we're going to be hearing, you know, as so many of these companies are really trying to rush to bring some sort of vaccine or antibody treatment to market, that we're just going to be hearing a lot more flops and failures than we are successes?

JARED HOLZ: Yeah, most likely. I mean, I think even the non-- the non-flops could be deemed unsuccessful if there are better programs that sort of supersede them or are viewed as being better. I mean, I can't imagine that any of us, you know, you-- you, I, or others, would take the second, third, fourth best vaccine, right? So by proxy, you know, whoever comes out with the most efficacious/safest, I think is going to be the winner.

Maybe you have, you know, one, two, or three winners, but everyone else in this conversation-- which I, you know, that's the reason for the we comparison-- I feel like is a zero. So we'll see. And we've already had a lot of setbacks with respect to some of these other programs, Johnson & Johnson and AstraZeneca, those trials were paused. They're back on now. And then the Lilly antibody program having some difficulties too. So we've seen a number of setbacks already, and I'm guessing we see many more.

KRISTIN MYERS: So I want to ask you lastly before we go, yesterday we had Amy Coney Barrett, her nomination obviously confirmed in the Senate. Democrats, of course, had been saying that health care was at risk with her appointment. Wondering what you think the impact on health care companies might be going forward?

JARED HOLZ: It's not good if-- if Trump were to win the election and this trial is heard again. You know, obviously, I think there's going to be significant concern that the Court overturns part or all of the ACA. Now, it's interesting because she hasn't really been all that articulate or, you know, rejecting of the idea that the ACA is a legitimate bill so far.

I think some of her comments have been very mixed. So I'm not-- I don't think that there is going to be an event where the entire law gets overturned, but I think as far as like investor sentiment is concerned, if you do have, you know, 6 to 3 Republicans and some that are very conservative on that bench and Trump were to win again, then it becomes something that I feel like makes health care a way less clean sector for investors.