COVID-19 crushed the stock market in March. The only real survivors were companies involved with testing, treatments and vaccines. Since then, markets have stabilized as production of test kits ramps up and vaccine hopes are beginning to solidify. However, COVID-19 cases are continuing to rise, and, if anything, this will only create more demand for these coronavirus stocks — meaning potentially even more upside.
At this point, Wall Street doesn’t seem to be responding to a rise in confirmed cases as another government-mandated lockdown seems implausible. Also, the Dow Jones industrial average and S&P 500 are still negative for the year. The market still could rise from here, but it will be with the help of coronavirus stocks.
24/7 Wall Street has picked out a few of the best and brightest coronavirus stocks that could still see a big push as 2020 continues. This week was huge in terms of the coronavirus vaccine stocks, as more companies are getting closer to the finish line.
Moderna Inc. (NASDAQ: MRNA) made headlines earlier this week after the company reported incredibly positive data from the early-stage trial of its coronavirus vaccine. The results came from its Phase 1 trial of MRNA-1273.
The long and short of it is that this vaccine candidate induced antibody reactions in all 45 patient participants in the trial and there were no serious side effects. These uniform results open the door for Moderna to conduct a much larger study of roughly 30,000 patients, which is set to begin on July 27.
The company has completed manufacture of the vaccine required to start the Phase 3 study. With the Phase 3 dose being finalized, the company remains on track to be able to deliver roughly 500 million doses per year, and possibly up to 1 billion doses per year.
At the beginning of this week, Pfizer Inc. (NYSE: PFE) and BioNTech S.E. (NASDAQ: BNTX) received a Fast Track designation from the U.S. Food and Drug Administration (FDA) for two of their four coronavirus vaccine candidates.
This designation was granted based on preliminary data from Phase 1/2 studies that are currently ongoing, as well as animal immunogenicity studies. The companies released early data from the ongoing U.S. Phase 1/2 study for the product candidate BNT162b1 at the beginning of this month.
BNT162b1 and BNT162b2 are the two most advanced vaccine candidates in the BNT162 program currently being evaluated in ongoing Phase 1/2 clinical studies in the United States and Germany.
Another dynamic duo involved in the treatment of COVID-19 is Regeneron Pharmaceuticals Inc. (NASDAQ: REGN) and Sanofi S.A. (NASDAQ: SNY). They have released preliminary results from the Phase 2 portion of the ongoing Phase 2/3 trial evaluating Kevzara in hospitalized patients with “severe” or “critical” respiratory illness caused by COVID-19.
As more (positive) developments come out, these stocks rise or further justify their valuations. Looking ahead, Regeneron and Sanofi’s ongoing Phase 3 portion of the trial was supposed to report results in June, but a missed timeline will push these results into July. Either way, these companies are still on the right track despite this setback.
Two other companies leading the way in testing for the coronavirus are Quest Diagnostics Inc. (NYSE: DGX) and Laboratory Corp. of America Holdings (NYSE: LH). These companies have seen an unprecedented surge in demand for molecular COVID-19 testing beginning in late June, effectively outpacing current testing capacity.
Again, as cases rise, demand for testing will rise as well. There is more upside for these companies as they continue to ramp up their production of tests.
While these Quest and LabCorp are now able to run 120,000 and 130,000 molecular diagnostic tests per day, respectively, both companies expect to ramp to 150,000 tests per day by the end of July. Since the onset of the pandemic, members of the American Clinical Laboratory Association (ACLA) have conducted roughly 19 million tests in the United States. Out of these 19 million, Quest Diagnostics and LabCorp account for 7 million and 6 million, respectively.
Novavax Inc. (NASDAQ: NVAX) recently was awarded $1.6 billion by the federal government as part of Operation Warp Speed. The stock saw over a 30% gain on that day alone, but the company only had a market cap of $4.7 billion at the time.
The cash injection to Novavax is meant for its late-stage clinical development of a vaccine. This includes a pivotal Phase 3 clinical trial of NVX‑CoV2373, Novavax’s COVID-19 vaccine candidate. This money is also meant to establish large-scale manufacturing and deliver 100 million doses of the vaccine as early as late 2020.
If all goes according to plan, Novavax will be set up to win big once it crosses the regulatory finish line. It’s worth pointing out that this stock has made an incredible run in 2020 already, with shares up nearly 3,000% year to date. There is still more upside, but now there are more questions on valuation.