The U.K. became the first country to approve a Covid-19 vaccine, jointly developed by Pfizer (NYSE:PFE) and BioNTech (NASDAQ:BNTX), on December 2. The very next day, Moderna (NASDAQ:MRNA) submitted a “request for an Emergency Use Authorization (EUA) from the U.S. Food and Drug Administration (FDA) and conditional approval from the European Medicines Agency (EMA).”
The real possibility that a working vaccine is within reach has given hope to individuals, businesses and nations alike. The markets have likewise been buoyed by the news. Over the past weeks, broader indices such as the Dow Jones, the Nasdaq and the S&P 500 have all hit fresh new highs. However, there are still likely to be vaccine-related hurdles in the way.
Recent article published in the British Medical Journal (BMJ) by Dr. Partha Kar, consultant in diabetes and endocrinology, Portsmouth Hospitals NHS Trust, U.K., highlights:
“The next phase will be hugely important… delivery. Expect heated discussions around who will get a vaccine “first”: if it’s healthcare professionals, why not teachers or shielded groups? As ever, the debate will be played out in public, shot through with politics, bias, and vested interests. We must also consider the practicalities of delivering the vaccine during a pandemic, with distancing and other restrictions, as well as the vaccine’s storage and delivery requirements.”
With that information, here are 7 coronavirus vaccine stocks still in the race:
- AstraZeneca (NYSE:AZN)
- Biogen (NASDAQ:BIIB)
- BioNTech (NASDAQ:BNTX)
- GlaxoSmithKline (NYSE:GSK)
- Moderna (NASDAQ:MRNA)
- Pfizer (NYSE:PFE)
- Sanofi (NASDAQ:SNY)
The World Health Organization (WHO) releases regular updates on “COVID-19 candidate vaccines.” Market participants should expect volatility in the days ahead as vaccine news headlines ebb and flow. However, long-term investors should keep a close eye on some of the top names involved in the science and commercialization behind a potential cure.
Vaccine stocks: AstraZeneca (AZN)
52-Week range: $36.15 – $64.94
YTD change: Up 18.22%
Dividend yield: 2.65%
Our first stock comes from the other side of the Atlantic. Since the early days of the pandemic, the Cambridge, UK-headquartered AstraZeneca has been working with scientists from Oxford University to develop an effective cure. Recent weeks saw encouraging results from their clinical trials.
AstraZeneca announced Q3 results in early November. Total revenue was $19.2 billion, up 8%. Earnings per share (EPS) of $2.95 meant an increase of 13% YoY.
CEO Pascal Soriot commented, “Highlights of the sales performance included further success in Oncology and an acceleration in the progress of Farxiga. Our pipeline also excelled, with Farxiga expanding its potential beyond diabetes and heart failure with ground-breaking new data in chronic kidney disease, while regulatory submission acceptance was achieved for anifrolumab in lupus.”
AZN stock’s forward P/E and P/S ratios stand at 21.37 and 5.24, respectively. From a historical point of view, valuations metrics are frothy. However, the prospects of a successful vaccine in the near term is real. Therefore, investors may consider buying the dips, especially, if there is a short-term decline below $50.
52-Week range: $223.25 – $374.99
YTD change: Down 18.22%
Dividend yield: N/A
Cambridge, Massachusetts-based Biogen develops therapies for a range of diseases. In addition to serious neurological and neurodegenerative, it has advanced research programs in multiple sclerosis (MS) and neuroimmunology, Alzheimer’s disease and dementia, neuromuscular disorders, movement disorders, ophthalmology, immunology, and pain.
Around 75% of annual revenues come from its impressive MS franchise. Its pipeline also includes several late-stage programs on its core areas.
Biogen announced Q3 results in late October. Revenue came at $3.4 billion, a 6% decline YoY. Non-GAAP net income was $1,4 billion and decreased 18% from Q3 2019. Non-GAAP diluted EPS was $8.84, a 4% decline. Free cash flow, defined as net cash flow from operations less capital expenditures, stood at $1.1 billion.
CEO Michel Vounatsos cited,“We have continued to allocate capital to create the opportunity for long-term shareholder value, including business development with our new collaboration in Parkinson’s disease.”
Covid-19 vaccine development has not been Biogen’s main focus. Nonetheless, it has teamed with the Broad Institute of MIT and Harvard, and Partners HealthCare to build a Covid-19 biobank.
Biogen points out, “The biobank, comprised of blood samples and other medical and biological data, will help researchers better understand the biology and behavior of the virus. This information will support the work that scientists will do to design and develop potential vaccines, treatments and other critical breakthroughs.”
Therefore, the company is contributing to developing an effective cure in other scientific ways. BIIB’s forward P/E and P/S ratios are 9.50 and 2.84, respectively. We regard the shares to be undervalued. The group will possibly generate stable long-term shareholder returns in the quarters to come.
52-Week range: $20.38 – $128.13
YTD change: Up 249.80%
Dividend yield: N/A
Before the coronavirus pandemic, Germany-based BioNTech specialized in therapies for cancer and messenger RNA (mRNA) vaccine development. Over the past decade, BioNTech has established relationships with a plethora of biopharma companies including Fosun International (OTCKMKTS:FOSUY), Genmab (NASDAQ:GMAB), Pfizer, Regeneron Pharmaceuticals (NASDAQ:REGN), Roche (OTCKMKTS:RHHBY), and Sanofi.
2020 was the year these partnerships paid off for BioNTech and its shareholders. In early November, BioNTech and Pfizer announced that their new vaccine was 90% effective. It might not be an exaggeration to say that the demand for their vaccines will outstrip supply. BNTX shares started the year around $35. Now they are just shy of $120.
The group announced FY2020 Q3 results in early November. Revenue came in at 67.5 million euros, compared to 28.7 million euros a year ago. Net loss was 210.0 million euros, while a year ago, it had been 30.1 million euros. Total cash and cash equivalents as of September 30 stood at 990.5 million euros.
Ugur Sahin, BioNTech’s CEO, said, “We have initiated the first rolling regulatory submission processes for our COVID -19 vaccine program in the EU, the UK and Canada…. We believe the prospects for the company have never been brighter.” Since then, the U.K. has approved the vaccine.
Long-term investors could consider buying into the declines in BNTX shares. In the coming quarters, the company may also find itself a takeover candidate. However, short-term traders should exercise caution, as BioNTech is highly volatile.
52-Week range: $31.43 – $48.25
YTD change: Down 20.77%
Dividend yield: 5.45%
Our next stock is a U.K.-based global healthcare group, namely GlaxoSmithKline. It is well-known for a range of pharmaceuticals, vaccines and consumer products. Sales numbers from Shingrix, GSK’s shingles vaccine, as well as its meningitis vaccines, make the company the world’s largest vaccine manufacturer.
Glaxo released released FY2020 Q3 results in late October. Sales were 8.6 billion pounds, a decline of 8% YoY. Adjusted operating profit was £2.7 billion, 4% lower than 2019. Management noted that the pandemic has disrupted vaccinations for many diseases, affecting revenues.
CEO Emma Walmsley commented:
“…we continue to make good progress on our preparations to separate the Group and create two new companies – in Biopharma and Consumer Health – which we believe will deliver options for sustainable growth and returns to shareholders. We are also urgently advancing possible COVID-19 Solutions with our partners, including clinical trials for antibody therapy VIR-7831 and three different adjuvanted vaccines. We expect to see data on all of these before the end of the year.”
Top-line numbers have suffered in recent quarters as some key drugs have gone off-patent. However, analysts expect new drug approvals starting with the new year. Over the past several months, Sanofi and GSK have been collaborating on a potential vaccine against the novel coronavirus.
In late October, the two pharma giants “signed a Statement of Intent with Gavi, the legal administrator of the COVAX Facility, a global risk-sharing mechanism for pooled procurement and equitable distribution of eventual COVID-19 vaccines. Sanofi and GSK intend to make available 200 million doses of their adjuvanted recombinant protein-based COVID-19 vaccine, if approved by regulatory authorities and subject to contract, to the COVAX Facility.” InvestorPlace readers may want to read up on Covax to keep abreast of vaccine efforts.
GSK stock’s Forward P/E and P/S ratios are 11.74 and 2.06, respectively. Passive income seekers would possibly not want to miss the dividend yield of almost 5.5%.
52-Week range: $17.68 – $178.50
YTD change: Up 702.18%
Dividend yield: N/A
Like BioNTech, the Cambridge, Massachusetts-based biotech group Moderna is also using mRNA science to create medicines. It has developed strategic alliances with AstraZeneca, Merck (NYSE:MRK) as well as the Defense Advanced Research Projects Agency (DARPA) and the Coalition for Epidemic Preparedness Innovations (CEPI).
Moderna released FY2020 Q3 results in late October. Revenue came at $157.9 million, compared to $17.0 million a year ago. Net loss was $233.6 million compared to $123.2 million YoY.
Stéphane Bancel, Chief Executive Officer, cited:
“I believe that if we launch our COVID-19 vaccine, 2021 could be the most important inflection year in Moderna’s history. We will have the resources to scale Moderna to maximize the impact we can have on patients in the next 10 years through numerous new medicines.”
In the case of an upcoming approval of Moderna’s vaccine, revenues in the new year could be close to $35 billion for the company. Current forward P/E and P/S ratios are 57.80 and 226.44, respectively. We would look to buy the dips in shares in a long-term portfolio. However, short-term investors should remember that MRNA stock is subject to wild swings.
52-Week range: $26.43 – $41.4
YTD change: Up 2.72%
Dividend yield: 3.79%
As one of the world’s premier biopharma giants Pfizer needs little introduction. When 2020 started, very few in the biopharma space could have foreseen the company would be in the news due to the pandemic. Now, the vaccine developed by joints efforts of scientists from Pfizer and BioNTech stands as the first vaccine against the deadly virus. It has shown over 9% efficacy.
Pfizer released FY 2020 Q3 results in late October. Revenue came at $12.1 billion, a decline of 4% YoY. Adjusted income was $4.1 billion and decreased 3% YoY. Adjusted diluted EPS of 72 cents was also 3% lower than previous year’s 75 cents.
Frank D’Amelio, Chief Financial Officer and Executive Vice President, Global Supply, said:
“In the first nine months of the year, our Biopharma business grew 7% operationally,… This performance adds to our confidence in our ability to achieve our expectation of at least a 6% compound annual revenue growth rate through 2025 for New Pfizer.”
Although it is hard to know how much the vaccine will contribute to Pfizer’s revenues in 2021, investors may expect stability from the company. Forward P/E and P/S ratios are 12.21 and 4.22, respectively. We believe PFE stock deserves to be on your radar screen.
52-Week range: $37.62 – $55.00
YTD change: Down 0.18%
Dividend yield: 3.39%
Paris, France-based Sanofi is our final global pharma group. With its 100,000 employees, it operates in 170 countries along three global business units, i..e, Specialty Care, Vaccines and General Medicines.
Sanofi released Q3 results in late October. Sales came at 9.5 million euros, a 0.2% decline YoY. Net income was 2.3 billion, up 1.0%. Management highlighted the company added seven new Phase 3 programs to its oncology and immunology pipelines. Investors were also pleased to learn that the Covid-19 “adjuvanted recombinant protein-based vaccine Phase 1/2 trial [was] fully enrolled.”
CEO Paul Hudson commented:
“We achieved a strong quarter supported by solid sales from both Dupixent® and Vaccines which allows us to upgrade our full year guidance. Our COVID-19 vaccines development efforts continue on a fast track along with ensuring global access with pre-orders signed with major countries, regions, and non-profit organizations who will work to distribute the vaccine to those who most need it.”
Forward P/E and P/S ratios are 13.14 and 2.83, respectively. The shares could add diversification to long-term portfolios.
On the date of publication, Tezcan Gecgil owned PFE stock.
Tezcan Gecgil Ph.D. has worked in investment management for over two decades in the U.S. and U.K. In addition to formal higher education in the field, she has also completed all 3 levels of the Chartered Market Technician (CMT) examination.