BioTech Companies and Investors: The Race to Develop a COVID-19 Vaccine
Adding on the current political, economic, and healthcare instability faced by much of the country today, stock markets are erratic, clinical trials are risky, and drug development pipelines are unpredictable. These all pose significant threats to the development of a coronavirus vaccination, especially at a time when cases are surging yet again. July is crucial for leading biotech companies to continue developing a vaccine, and investors ought to be aware of whether they should invest and where.
Today, Pfizer Inc. and BioNTech SE announced that their COVID-19 vaccines were granted fast-track status. Considering that there are now over 3.4 million cases in the U.S, this is a small ray of hope for the world and shares rose upon the announcement of the fast-track designation. The two companies have teamed up to prevent the virus, and Pfizer also has other prospective growth opportunities such as its hemophilia A treatment partnership with the below-mentioned Sangamo Therapeutics. In March, Pfizer stock soared 17% in a single day when they announced they were working with BioNTech on a coronavirus vaccine. However, Pfizer sales have declined for the last four quarters and their year-over-year earnings-per-share are not the minimum 25% recommended by investors. In fact, the last year of strong gains for Pfizer was 2010. Based on all this information, Pfizer stock does not appear to be a buy right now, but it’s key to keep tabs on it to see how and if it develops the vaccine with BioNTech.
Biotech company Moderna was one of the first companies to move into clinical trials with a COVID vaccine. Their stock grew into triple digits but shares eventually stumbled after phase 3 trials were delayed. Furthermore, it’s unclear if their phase 2 results were worse than expected. Regardless, they have a few phase 2 programs that will move forward in the fall regardless of the success of the COVID vaccine project. With over $1.2 billion in cash on hand and less than $152 million in debt, they have plenty of potential still. Investors may want to wait for more news about Moderna’s other projects (aside from the COVID-19 vaccine) before investing.
Sangamo is a gene therapy company that recently reorganized its R&D sector. Splitting it into preclinical research and clinical development wings, the company demonstrated that they plan on needing more comprehensive development features in the future. Although they are currently highly unprofitable, their first major pipeline project is just months away from getting regulatory approval so they’re worth keeping an eye on. Additionally, Sangamo net $107.4 million in trailing 12 month revenue from its phase 3 clinical trial collaborations with Pfizer for its hemophilia A gene therapy. This is a promising figure, and following press releases about Sangamo’s phase 3 hemophilia gene therapy trial will helps investors anticipate stock growth
Editas Medicine’s stock price has recently grown and may even take off soon. People tend to follow this company closely given its heavy use of CRISPR and other gene editing technologies. Results from their phase 1 clinical trials for Leber congenital amaurosis should be ready by the end of the summer, and if they are successful, the stock should get a boost. Although they have no products approved for sale to date, their numerous preclinical development collaborations granted them high year-over-year quarterly revenue growth.
Vaxart is a smaller biotech company whose stock seems to be skyrocketing. Their market cap grew from $16.9 million in 2019 to $700 million today, and perhaps they will only continue to grow. Their stock has exploded because the company’s COVID-19 vaccine candidate has shown early indications of effectiveness despite being from maybe the least developed company in the race for a vaccine. Their vaccine is actually an oral tablet, like the company’s other vaccines, but their claims of its efficacy are based on internal studies of its influenza vaccine rather than specific studies for COVID-19. And, Vaxart will likely need support from other collaborators because none of the company’s programs have advanced beyond phase 2 clinical trials thus far and the pace of COVID-19 vaccine development might be difficult for the relatively small and newer company. They do not have any products currently approved for sale and have low 12 month revenues as well. Either way, Vaxart presents a compelling opportunity for investors and has more than enough money to continue working on its pipeline projects. Investors should keep Vaxart in their sights, not just for their coronavirus vaccine but for their other vaccine projects as well.
Feel free to explore this interactive vaccine tracker created by the New York Times for more information.