Coronavirus Vaccine Stocks: What to Watch

With all eyes on the latest coronavirus vaccines from Pfizer and Moderna, investors have been focussing on the stocks of a range of biotech companies developing the Covid-19 vaccines including Pfizer (NYSE: PFE), Moderna (NASDAQ: MRNA), Novavax: (NASDAQ: NVAX), GlaxoSmithKLine (NYSE:GSK) and Johnson & Johnson (NYSE: JNJ). Many investors looking to buy into these companies’ stocks, are also interested in the size of these pharmaceutical companies and their other products. For example, when it comes to Pfizer the pharmaceutical giant has a $203 billion market cap and a range of drugs in the market, while Moderna has a $38 billion market cap and no drugs in the market. For many investors, investing in one of these companies does not necessarily mean investing for the coronavirus vaccine. BioNTech, Pfizer’s German biotech partner for example, offers good value as it is connected both to the vaccine and the mRNA technology used to develop the vaccine and potentially other vaccines.

Let’s take a look at some of these companies to understand how their coronavirus programs are potentially appealing and can deliver potential returns for shareholders.

Pfizer, Moderna, Novavax

In general, stocks have had a good month in November with the Dow Jones Industrial Average and Nasdaq Composite rising 11.8%, and the S&P 500 10.8%. Positive news about a coronavirus vaccine as well as the US elections results with president-elect Joe Biden have helped boost market sentiment. Coronavirus vaccine stocks had even a better month, with December proving to be a great month for coronavirus vaccine stocks. A couple of them have already requested Emergency Use Authorisations (EUA) and others are advancing in phase 3 trials. GlaxoSmithKline (NYSE:GSK), Novavax (NASDAQ:NVAX), and Johnson & Johnson (NYSE:JNJ) aren’t ready yet to sell their vaccines, but they’ll probably report soon on their clinical trial data, and if they get regulatory approval, their stocks will be on the rise.

Pfizer

In December, Pfizer’s stock rose after regulators in the UK authorised the company’s BioNTech-partnered coronavirus vaccine. The coronavirus vaccine is 95% effective against Covid-19 as well as people who have already been exposed to the virus. Pfizer and BioNTech said that they can make up to 50 million doses in 2020 and 1.3 billion doses in 2021. The UK has received 40 million doses already.

In November, Pfizer announced that it had completed the transaction to combine its Upjohn Business with Mylan N.V. to form Viatris Inc.

Being one of the biggest pharmaceutical companies in the world, Pfizer is considered a reliable company with great prospects. However, its recent sales declined, and adjusted earnings are expected to be flat, marking five quarters in decline. Perhaps investors who look for companies with stocks that can provide accelerating earnings and sales growth, might turn away from Pfizer, but its future due to the vaccine might prove to change things.

Moderna

Moderna is a clinical-stage biotechnology company which is currently carrying out phase 3 trials of its Covid-19 vaccine. If the vaccine is effective at least 70%, the company will seek emergency approval from the FDA. The Moderna stock has gone up 253% this year. All of the gains since Moderna’s initial public offering in late 2018 were generated in 2020. If someone invested in 2018, they would need to have invested over $120,000 to grow to $1 million today.

For Moderna’s stocks to continue to rise, the company’s COVID-19 vaccine mRNA-1273 would need to be successful. The company has already filed for emergency use authorization (EUA) for mRNA-1273 on 30th of November and on 17th December an FDA advisory committee will review its application. If mRNA-1273 gets regulatory approval, Moderna will receive billions of dollars as the biotech has supply deals with the EU, US, UK, Canada, Japan, Qatar, Israel, and Switzerland.

Moderna’s market cap is close to $60 billion which shows the revenue potential for mRNA-1273. Moderna CEO Stephane Bancel has said that the company plans to invest profits from mRNA-1273 into increasing its production, with up to 50 mRNA candidates into clinical testing, including an mRNA seasonal flu vaccine.

Novavax

Novavax is a vaccine development company which has begun late-stage trials of its Covid vaccine in the UK and is expected to start its large-scale phase 3 trials in the US and Mexico in December. The company doesn’t have any other products on the market but its NanoFlu vaccine could be ready for FDA approval. The Federal government has supported the company with $1.6 billion funding budget. The stock rose 2,000% year-to-date. If its vaccine is approved, the stock could potentialy rose even more next year.

But its strength is not only limited to its coronavirus vaccine, as Novavax’s NanoFlu vaccine to treat influenza in older adults, could be approved and be available in the market soon enough. If the market continues to be as cheerful about Novavax’s prospects, then 2021 would be an even greater year for the vaccine development company.

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