These companies have promising leads for the holy grail: a vaccine.
The only way to win the war against the pandemic for good is to find a vaccine, and pharmaceutical companies around the world know that if they can produce a viable vaccine, then they (and their shareholders) will profit. But with more than 100 vaccines in the works and more than 20 already advancing through human trials, there’s still one big question: Which pharmaceutical company will come up with a vaccine first? In the months since this race began, some vaccine stocks have lagged while others have pulled ahead, and investors need to know who the front-runners are, as well as the dark horses. So which one is going to produce a vaccine first, and which pharmaceutical stock should you invest in?
Moderna (ticker: MRNA)
The early lead in the vaccine race went to Moderna — shares skyrocketed in late February when the company announced it would be working on a vaccine alongside the National Institute of Allergy and Infectious Diseases, and year-to-date shares of Moderna have risen around 284%. In an incredibly quick turnaround, Moderna began phase 1 trials on March 16 and continued right on to phase 3 trials at the end of July, making Moderna the company to beat in the race for a cure. The only problem: pricing. Moderna is a small biotech that lacks the ability to subsidize a cure like its larger rivals, and its plan to price each dose at slightly under the $40 range may turn off potential buyers and investors.
Moderna’s quick transition from concept to trial is thanks to its utilization of RNA to neutralize the virus, and Pfizer is trying to mimic the idea in its partnership with BioNTech (BNTX), a German biotech company. Together, the two companies have pushed forward into phase 2 and phase 3 studies of their vaccine. And if it’s effective, Pfizer in particular stands to benefit. The company has closed a $1.95 billion deal with the U.S. government as part of Operation Warp Speed, whereby the U.S. would receive the first 100 million doses of Pfizer’s vaccine for distribution to its citizens, with the rights to acquire up to 500 million doses. Clearly, the U.S. has placed a large bet on Pfizer and BioNTech — now all they have to do is deliver.
Finding a cure for the virus is a global goal, and companies around the world are tapping into some of the brightest minds on the planet to speed them along their way toward a vaccine. In the case of British pharmaceutical giant AstraZeneca, the company is working alongside researchers from Oxford University in the U.K. on their vaccine, which looks extremely promising. Not only does the vaccine candidate promote the production of T-cells to protect against the virus, it also produces antibodies to fight the virus for the long term. This one-two punch makes AstraZeneca’s vaccine a leading contender in the race to find a cure, and while researchers at Oxford conduct phase 3 trials, AstraZeneca will do the heavy lifting of production and distribution of the vaccine when trials are complete. The U.S. has announced it will pay $1.2 billion for access to 300 million doses.
Johnson & Johnson (JNJ)
Back in January, Johnson & Johnson became the first major pharmaceutical company to announce it was working on a vaccine, and it planned initially to begin human testing in September. Those plans were dramatically accelerated in the months to come, and by the end of July, the company was underway with its phase 1/2a study. Clearly, one of the perks of being a gigantic international pharmaceutical conglomerate is the ability to jump-start a vaccine and begin trials quickly. The other benefit is the ability to produce more than 1 billion doses of the vaccine in short order, a promise that earned Johnson & Johnson a $1 billion deal with the U.S. government to ramp up its capacity for manufacturing a vaccine, expanding its current manufacturing facilities and building a new one in the U.S. Johnson & Johnson also said it will develop and deliver 100 million doses of its coronavirus vaccine for the U.S., with the option to order an additional 200 million doses.
The race for a vaccine has shone a spotlight on Novavax, a relatively unknown pharmaceutical company that has never brought a vaccine to market before. Nevertheless, the company has seen encouraging results from its phase 1 trial, which produced both antibodies and T-cells in test subjects, and investor optimism has pushed shares up an insane 3,600% percent year to date. That optimism is shared by the U.S. government, which paid Novavax $1.6 billion to finance the research and eventual production of 100 million doses of its vaccine by early 2021. Novavax has partnered with Emergent BioSolutions (EBS) to roll out the vaccine should it prove viable, but first, Novavax has to prove that it can make good on its promises.
During these unprecedented times, some companies are making surprising moves to find a vaccine first, and two of the world’s largest pharmaceutical companies teaming up is certainly surprising. GlaxoSmithKline was already partnering with China-based Clover Biopharmaceuticals to test its vaccine candidate with its pandemic adjuvant system. Its deal with Sanofi would combine the adjuvant for a vaccine. Adjuvants increase the body’s natural immune response when given a vaccine, and the two companies hope that this will make their vaccine more efficient than others. Unfortunately, it seems highly unlikely that a Sanofi/GSK vaccine will win the race since human trials have yet to begin. But a recent investment from Operation Warp Speed of up to $2.1 billion for testing and production means that smart investors will keep an eye on these two nonetheless. Results for the phase 1 study are expected in August.
Inovio Pharmaceuticals (INO)
Another company utilizing DNA to stop the virus in its tracks is Inovio. Inovio announced positive phase 1 trial results at the end of June, with plans to move into phase 2/3 trials this summer. There are only two problems. First, Inovio is squandering the early lead that its impressive DNA encoding technology gave it earlier this year, and the company seems to be falling behind the competition as its rivals rapidly move onto the next phase of testing. And second, while the results of Inovio’s initial testing phase may have been positive, the company declined to provide the same level of detail and data on how efficacious its vaccine candidate was. This leaves a lot of questions about Inovio’s future in the vaccine race unanswered, but investors don’t seem to mind. Shares have risen over 560% year to date.
Pharma stocks working on a vaccine to end the pandemic.
— Moderna (MRNA)
— Pfizer (PFE)
— AstraZeneca (AZN)
— Johnson & Johnson (JNJ)
— Novavax (NVAX)
— Inovio Pharmaceuticals (INO)
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Update 08/07/20: This story was published at an earlier date and has been updated with new information.