Novel coronavirus vaccine stocks are climbing higher on Monday as headlines keep emerging. It may even feel as if there is no room for more news. But, the race for a vaccine remains in motion, and that could mean the biggest gains could be just around the corner.
What am I talking about? Several of the leading contenders are in the midst of phase 3 clinical trials. And while we may not see a vaccine before the November presidential election, one or more of these candidates could get regulatory approval before years’ end.
With this in mind, this pandemic trade remains fully in play. In fact, the recent vaccine stock selloff may mean now is the time to enter names in this space. Yes, much uncertainty remains whether one, several or none of these vaccine names will be able to bring a viable candidate to market. But, that’s hardly a reason to not keep them on your radar.
In a field of hundreds of contenders, these seven coronavirus vaccine stocks are the ones to watch:
- AstraZeneca (NYSE:AZN)
- CureVac (NASDAQ:CVAC)
- GlaxoSmithKline (NYSE:GSK)
- Inovio (NASDAQ:INO)
- Johnson & Johnson (NYSE:JNJ)
- Moderna (NASDAQ:MRNA)
- Novavax (NASDAQ:NVAX)
Coronavirus Vaccine Stocks: AstraZeneca (AZN)
So far, retail investors have mainly focused on the biotech names — like Moderna and Novavax — working on vaccine candidates. But, major pharmaceutical names like AstraZeneca have been heavily involved in finding a vaccine as well. In fact, AstraZeneca’s prospective vaccine is one of the top contenders in this horse race.
The company’s AZD1222 vaccine has already entered late-stage trials in the U.S. Not only that, the company anticipates producing 3 billion vaccine doses. The U.S. government has already ordered 300 million doses. The company also has a major vaccine deal in the works with the United Kingdom.
So, what does this mean for AZN stock? Sure, the company said it would not profit from its vaccine. Yet, while this means it may not be a needle-mover for the stock, success with AZD1222 could come at the expense of the other candidates. This could severely impact share prices for the aforementioned biotech names, along with other names (like CureVac) with a vaccine catalyst priced into shares.
With this in mind, AstraZeneca may not be a great pandemic play in and of itself. But, given this company’s potential affect on other pandemic plays, this remains a stock to keep on your radar.
A recent IPO, German-based CVAC stock may have the edge when it comes to capturing deals in Europe and other international markets.
How so? As I wrote on Sept. 3, the company may land a major vaccine deal with the European Commission. And, with its lower cost per dose than rivals, the company could secure supply deals with developing countries looking for a low-cost solution.
The one problem? CureVac is far behind when it comes to getting through clinical trials. While candidates from AstraZeneca and Moderna are already in Phase 3 trials, this company’s candidate is still in Phase 1. It may not wrap clinical trials up until the end of this year. By that time, rivals could already have a vaccine ready to be distributed.
Given this factor, it may not be best to dive into shares right now. At today’s prices, the company’s vaccine catalyst may already be more than priced in. Not only that, considering the company has little else to fall back on if its candidate fails to deliver, falling short of producing a vaccine could decimate the share price.
In short, keep an eye on CureVac, but do not dive in just yet.
Coronavirus Vaccine Stocks: GlaxoSmithKline (GSK)
With names like AstraZeneca and Moderna as front-runners, it is easy to forget that this major pharmaceutical name is also a coronavirus vaccine play. The company, which has partnered with Sanofi (NASDAQ:SNY) to develop a candidate, may only be in Phase 1 trials. But, this prospective vaccine is far from a loser.
Why? Namely, the candidate from GlaxoSmithKline and Sanofi is one of the participants in the Operation Warp Speed program. That is to say, this remains a top contender in the wide-open field. With Uncle Sam providing some support for the vaccine’s development, there’s a chance the company could gain a respectable share of the Covid-19 vaccine market.
In addition, as Barron’s reported Sept. 3, the vaccine’s less strict storage requirements relative to its rivals may also help give it an edge.
Yet, like with AstraZeneca, don’t count on this to put points in GSK stock. Like with its Big Pharma peer, the company does not expect to profit from its coronavirus endeavors. But, any progress made by GSK could mean bad news for some of the smaller candidates out there.
Bottom line: You probably will not see big returns buying GlaxoSmithKline as its vaccine goes through clinical trials. But, like with the other major pharma names mentioned in this article, keep an eye on its stock. It has the potential to seriously impact its rivals.
INO stock may have been a top trade among retail investors this summer. But now, it seems the party is over for this high-flying (and now tumbling) vaccine play.
How so? As I put it late last month, while the company is still in the running, it is falling fast behind. Treatments from AstraZeneca and Moderna are leaps and bounds ahead of the pack.
But, that is not all! As InvestorPlace contributor Ian Bezek wrote recently, the fact the U.S. government did not include Inovio in the Operation Warp Speed program is another sign the company has slim odds of success.
Shares have fallen substantially from their highs (over $30 per share) set in June. But, the pain may not be over just yet. Shares continue to trend lower, even as they approach the single digits. The stock today trades for around $11 per share.
So, what is the play here? If Inovio manages to pass the testing with flying colors and bring its vaccine to market, it could see some upside benefit. But, with so much hype already priced into shares, betting the ranch on this vaccine doesn’t look like the best call. Keep it on your radar, but hold off for now.
Coronavirus Vaccine Stocks: Johnson & Johnson (JNJ)
JNJ stock is another major pharma name that is also a vaccine play. The company’s Janssen Pharmaceutical unit could wind up producing as many as 1 billion doses of its candidate. Yet, like its peers, the company doesn’t plan to profit from its development of a viable vaccine.
Simply put, you can’t really call this a catalyst for Johnson & Johnson shares. Sure, speculators buying on headlines could help drive shares higher temporarily. But, it is unlikely this will help move the needle longer than that.
And, as this commentator recently wrote, with the company’s modest levels of projected growth, coupled with shares trading at all-time highs, jumping in today doesn’t look that much like a great opportunity.
Sure, as a blue-chip name, this remains a high-quality stock to buy. Perhaps even a strong buy on a pullback. This venerable healthcare company may be doing good by working on a solution to our current crisis. But, do not buy JNJ stock as any sort of coronavirus vaccine play.
A few months back, I was skeptical about diving into vaccine play MRNA stock. Shares appeared to have gotten ahead of themselves, given the rise in this company’s market capitalization relative to its potential profit from developing a viable vaccine.
But, in recent weeks, my bearishness has turned to bullishness. Why? Firstly, the strong support this company and its vaccine candidate has received from the White House. Granted, all bets are off whether there is a vaccine-related “October surprise” ahead of election day. But, having the current administration in its corner remains an advantage for Moderna.
Secondly, this company’s candidate is further down the pipeline than most of the other candidates. This first-mover advantage could mean shares not only retrace past highs, but head even higher.
Yes, there are a lot of expectations priced into MRNA stock today. Buying now may leave you exposed to tremendous downside if its mRNA-1273 falls short. But, if you are looking for a pandemic vaccine play, this remains one of the best options out there.
Coronavirus Vaccine Stocks: Novavax (NVAX)
It is safe to call NVAX stock the dark horse among the vaccine plays out there. Yes, like its major rivals, the company has secured major supply deals with several countries. But, with the company not starting Phase 3 trials of its NVX-CoV2373 until next month, it does not exactly have first-mover advantage.
And, while the vaccine may have its merits, being behind the rest may mean it grabs a smaller piece of the global vaccine pie. In turn, this could mean the company’s current valuation more than prices in the positive impact a vaccine will have on its bottom line.
So, what is the play here? Like with some of the other plays listed here, stay on the fence for now. Shares could rebound on the heels of positive vaccine news. But, do not count on this stock to make another epic move higher after its blockbuster performance so far this year.
On the date of publication, Thomas Niel did not have (either directly or indirectly) any positions in the securities mentioned in this article.
Thomas Niel, contributor to InvestorPlace, has written single-stock analysis since 2016.