The novel coronavirus pandemic has wreaked havoc on markets, and just when stocks are into recovery mode, we have the specter of a recession to reckon with. If not an outright depression. That’s going to cause challenges for many sectors. However, if there’s a bright spot in all this, it’s biotech stocks.
With the scramble for viral and antibody testing kits, and the ultimate goal of finding a vaccine for Covid-19, many biotech companies are suddenly in the spotlight. Even those that aren’t directly working on a Covid-related solution look more attractive. Besides the entire industry getting more attention than usual, investors know they’re less at risk of a consumer spending crunch that could hit tech companies like Apple (NASDAQ:AAPL).
With that lead-up, here are seven biotech stocks that are positioned to pay off nicely.
- Co-Diagnostics (NASDAQ:CODX)
- iBioPharma (NYSE:IBIO)
- Moderna (NASDAQ:MRNA)
- Biogen (NASDAQ:BIIB)
- Gilead Sciences (NASDAQ:GLID)
- Vertex Pharmaceuticals (NASDAQ:VRTX)
- Inovio (NASDAQ:INO)
Some have seen their share price explode this year based on their Covid-19 involvement. Even so, that would just be the start should their research pay off.
Biotech Stocks to Buy: Co-Diagnostics (CODX)
You may have read my recent overview of Co-Diagnostics. This Utah-based biotech company has posted amazing growth in 2020 on the strength of its Logix Smart Covid-19 test kit.
Doctors quickly learned that symptoms aren’t a reliable way to determine if someone is infected with Covid-19. Accurate and fast testing for Covid-19 infections is critical to determining whether someone needs to be isolated and/or hospitalized for treatment. As the country begins to re-open, testing becomes even more critical as medical authorities monitor for potential second waves of the pandemic.
Looking into the future, testing is still going to be important for years — even if a vaccine is developed.
Co-Diagnostics is one of the leading providers of Covid-19 test kits, and it’s selling them to states faster than it can make them. That’s over 6 million to date, with production going full blast to manufacture another 20 million tests just to keep up with current and short-term demand.
CODX stock is up over 1,900% to this point in 2020, with no signs of running out of steam.
IBIO is one of the companies on the cutting edge of Covid-19 vaccine research. On March 26, the company announced its IBIO-200 vaccine candidate was being fast-tracked to pre-clinical immunization studies at Texas A&M University System’s (“TAMUS”) laboratories.
On April 27, the company announced the impressive scale of its manufacturing capability, should its vaccine prove to be effective:
“If our own proprietary SARS-CoV-2 Virus-Like Particle (“VLP”) program, IBIO-200, results in an approved vaccine, we estimate that we could make about 500 million doses of high-quality product annually at our Texas facility, depending upon the potency we see in the clinic.”
IBIO shares are up over 1,200% so far in 2020, but that would be a drop in the bucket should its IBIO-200 vaccine succeed.
Moderna is another play on the race for a Covid-19 vaccine. The American biotech company has been focused on mRNA therapy — modifying the body’s RNA to treat conditions including cancer, cardiovascular disease and infectious diseases.
That is exciting in itself, but it’s the infectious diseases angle that has investors watching closely. Moderna’s mRNA-1273 is a candidate as a Covid-19 vaccine, and it has potential. On May 18, the company announced positive results for Phase 1 testing of the vaccine, led by the National Institute of Health. These trials showed the subjects had antibody levels at or above levels measured in recovered Covid-19 patients, without showing serious side effects.
That news caused MRNA to rocket 29% in a single day of trading, and it’s now up 279% so far in 2020.
BioGen is a biotech company based in Cambridge, Massachusetts. You may recall the name from 2019. BIIB stock tanked in March 2019, falling 29% in its worst day of trading ever, after news broke that it was ending trials for a blockbuster Alzheimer’s drug called Aducanumab.
Fast forward a year, and BioGen is in the hunt for a Covid-19 treatment, in partnership with Vir Biotechnology Inc (NASDAQ:VIR). In March, it was announced the two companies are working on developing antibodies as potential treatments for Covid-19.
BIIB stock has been on a roller coaster this year — although it has still managed to post modest 5% growth — but there are two prizes in play. First, that Vir partnership could pay off. And second, Aducanumab (the Alzheimer’s drug) is back in play. The company announced new phase 3 clinical trials in January. Those were subsequently pushed to the third quarter (news that the market didn’t take kindly to), but the new clinical trials raise hope that the company has a winner in Aducanumab.
With nearly 50 million people currently suffering from Alzheimers worldwide, the potential payoff for Aducanumab is massive.
Gilead Sciences (GLID)
Regular readers know that Gilead Sciences is considered a strong buy right now. This biotech company was the first to get government approval for a coronavirus treatment.
On May 1, FDA-approval was issued for use of Gilead’s remdesivir drug for treatment of Covid-19. Remdesivir may not be a miracle cure, but clinical trials show it has reduced the recovery time required for some patients. With many hospitals facing bed shortages, anything that reduces the time Covid-19 patients spend there is a big win, and Gilead has donated 1.5 million vials of the drug.
The Institute for Clinical and Economic Review (ICER) — a pharma industry watchdog — recently assessed the fair sticker price for remdesivir therapy at up to to $4,460 per patient. That has real potential upside for GLID stock. If the success continues and remdesivir becomes a go-treatment for Covid-19, Piper Sandler analysts project it could generate up to $2 billion in revenue for Gilead in 2020 alone — even after giving away those 1.5 million doses.
At this point, GLID stock has posted 13% growth so far in 2020, even though it is down significantly from its $84 close (a two-year high) on April 30.
Vertex Pharmaceuticals (VRTX)
Boston-based Vertex has posted 30% growth so far in 2020. This biopharmaceutical company isn’t focused on Covid-19 research. So why is VRTX seeing a growth spurt?
It isn’t. Unlike many of the biotech and pharmaceutical companies that are suddenly seeing big gains in anticipation of a payoff from coronavirus-related projects, Vertex has been on a steady growth path since 2017, and especially since the fall of 2019. That’s continuing into 2020.
The company sells three different drugs for the treatment of cystic fibrosis, and all but owns that market. The latest treatment from Vertex — Trikafta — was approved by the FDA last October, and is applicable to 90% of global CF patients. Thus the accelerated pace of growth for VRTX stock starting last October.
With revenue up 77% in the first quarter, Vertex upped its full-year-revenue projections, when so many other companies have been busy slashing them.
Finally, Inovio, another biotech company that’s gotten the nod here before.
This is a company with a proven record of quickly bringing effective solutions to market for vexing diseases. This includes having a treatment to clinic for Ebola in 15 months, nine months for MERS and, six and a half months for Zika.
Is Inovio on the hunt for a coronavirus vaccine? You bet! The company currently has 40 humans enrolled in a phase 1 clinical trial, with preliminary data expected to be seen in June. Those trials have big backers, by the way, with both the Department of Defense and The Bill & Melinda Gates Foundation ponying up millions to accelerate testing.
INO stock has performed very well in 2020, posting gains over 390%.
Louis Navellier had an unconventional start, as a grad student who accidentally built a market-beating stock system — with returns rivaling even Warren Buffett. In his latest feat, Louis discovered the “Master Key” to profiting from the biggest tech revolution of this (or any) generation. Louis Navellier may hold some of the aforementioned securities in one or more of his newsletters.