The stakes for getting this right could not be higher.
COVID-19 has sickened more than seven million people around the world so far, and at least 405,400 people have lost their lives to the pandemic.
Innovative biotechnology companies have stepped up to the plate and are racing to create what could become a life-saving treatment for hundreds of thousands in the form of a vaccine.
I’m optimistic we could see one as soon as the end of the year.
The speed with which vaccine efforts got underway shows how far science has come. Researchers are currently working on 224 candidates, according to the Coalition for Epidemic Preparedness Innovations. About 10 of those have advanced to human trials.
That’s impressive considering the virus just started appearing about six months ago.
All of these researchers and companies are vying for what BMO Capital Markets estimates could be $30 billion in vaccine sales by the end of the decade.
As investors, we need to keep a close eye on the leaders. Some of those may surprise you…
One country leading the way in human trials wouldn’t even have been a possibility 10 years ago.
I’m talking about China. Its biotech sector was behind the rest of the world and incapable of such a feat.
But that’s all changed. If you’re a regular MoneyWire reader, you know we were among the first to pounce on the upside potential in China’s biotech sector.
It represents a rare 100X opportunity that can mint millionaires.
Before the pandemic struck, China’s government said it planned on ramping up biotech spending to 4% of 2020 GDP estimates over two years. That represented 116X growth in the sector!
Demand calls for it. China has a rapidly aging and more affluent population with rising healthcare needs for everything from cancer and high blood pressure to strokes, diabetes, and lung disease. And it has a government willing and able to spend big.
Early investors have also begun to back growing Chinese healthcare businesses.
Chinese biotech and healthcare firms have raised $2.1 billion in IPOs just this year in China, Hong Kong, and the United States. That’s nearly double from where it was at this same time last year, according to Refinitiv. About 30% of this year’s IPOs in Hong Kong have been healthcare companies.
The nation currently has six vaccine candidates in human trials.
CanSino Biologics (CASBF) recently became the first company in the world to move its vaccine candidate into Phase 2 testing. It’s also partnering with Canada’s Precision NanoSystems to develop a second possible vaccine against COVID-19.
Another candidate, developed by the state-owned China National Pharmaceutical Group, showed no safety issues in trials with monkeys. A human trial with more than 1,000 participants is now underway. This vaccine is similar to one being developed by Oxford University and AstraZeneca (AZN). The company has a separate candidate in clinical trials with more than 2,000 participants.
Private company Sinovac Biotech is carrying out Phase 1 and Phase 2 studies, while the Wuhan Institute of Biological Products and the Shenzhen Geno-Immune Medical Institute have other vaccine trials underway.
No matter who wins this “race,” the benefits to everyone will be enormous. It will also pave the way for the more rapid development of drugs to address pandemics going forward. A decade from now, potential pandemics will likely be dealt with in a matter of months – if not weeks – thanks to lessons learned from today’s efforts.
The pandemic and the more than 200 vaccines in development reinforce my prediction from last November that 2020 would be the Year of Biotech. Too many investors look to the big well-known names, and they’re missing the incredible government-backed opportunity coming from China.
We have a focused portfolio of four Chinese biotech stocks in my Early Stage Investor service. The average return since it was launched in April 2019 is 46%, which blows away the Dow Jones Shanghai Index’s (China’s equivalent to the S&P 500) 3% gain.
The top performer – up 140% since I recommended it – is an early stage biotech that focuses on transformative medicines for cancer, autoimmune disorders, and infectious diseases. It recently hit a fresh all-time high as China’s version of the FDA approved its treatment for an aggressive form of cancer that attacks the brain or spinal cord. More catalysts are ahead, including a possible new treatment of a potentially deadly bacterium that just entered a Phase 3 trial.
Another top performer is one of the best-performing healthcare stocks in China this year. It works with some of China’s biggest names in pharma and biotech, and yet it’s still very small. It’s one of my top microcap opportunities.
The prospects for breakthrough treatments in the Roaring 2020s has me more excited about the opportunities in biotech than I have been in many years. China is a hotbed right now, but there are good opportunities elsewhere, and smart investors should strongly consider having biotech stocks as part of your portfolio.
P.S. Some of the best biotech opportunities are in small companies on their way to becoming large companies.
It’s much harder for Apple (AAPL) to go up 10X when it’s valued at $1.5 trillion than it is for a small cap to go from $1 billion to $10 billion.
These are the kinds of microcap opportunities we like to go after, and four of the stocks in our Microcap Millionaire Portfolio are exciting healthcare companies. One is even a “nanocap” stock that I believe has 14X potential.
Matt McCall’s MoneyLine Podcast
Click here to listen to Matt McCall’s MoneyLine podcast! This week, Matt talks about Friday’s surprising jobs number, which triggered a massive rally that pushed the Nasdaq 100 to all-time highs. He discusses what all of that means for the market. Matt also provides an update on the companies working on COVID-19 vaccines and treatments. He touches on crypto, retail stocks, the market’s quick recovery, and more.
You can subscribe to this podcast on iTunes, Stitcher, Spotify, or wherever you listen to podcasts.
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