Are These The Top Biotech Stocks To Watch In June 2020?
The coronavirus pandemic is driving many biotech stocks to huge gains (and for some, losses). This year, the novel coronavirus has put the focus on biotech companies as both blue-chip and small-cap biotech stocks are racing towards finding a safe and effective vaccine. So the question here is, should you buy biotech stocks right now?
Biotech Stocks: Are They Worth A Shot?
You see, despite some huge gains over the last few months, and interest from investors big and small, many experts argue that betting on vaccine stocks is not much different than gambling in a casino. That could be true to a certain extent, but keeping close details on the dates of clinical data and development would increase our odds in winning the trading game. Back to our question, should investors buy biotech stocks?
Firstly, there are profitable biotech companies, and then there are those with no approved products. The former are usually the ones that have a pipeline of products in the market and are selling well. On the other hand, the latter, are usually working on a new product and do not have a product that could generate revenue in the short term yet. For instance, if you have an appetite for risky bets, small-cap biotech stocks that are working on Covid-19 vaccines can be your ultimate risk-reward play. Alternatively, if you are looking for growth biotech stocks that don’t move on such an epic scale, but are able to grow double-digit percentages, stocks like Gilead Sciences (GILD Stock Report) could be one of the best bets.
Be it large-cap or small-cap biotech companies, the swing in their share prices can be quite significant. That could be because biotechnology stocks are inherently volatile in nature. This year, many biotech companies are racing toward vaccines and treatments to Covid-19. But only a handful of these companies are going to emerge as winners. With that being said, are these biotech stocks on your watchlist this week?
- Square Versus PayPal: Which Fintech Stock Is A Better Buy
- Biotech Stocks In Focus; Do You Have These On Your Watchlist?
Best Biotech Stocks To Buy [Or Avoid]: AstraZeneca
First, up the list, AstraZeneca (AZN Stock Report) grabbed the spotlight once again after the company signed a contract with European government. The British drugmaker is going to supply European countries up to 400 million doses of the vaccine. While Covid-19 may have thrown the company a curveball, investors might want to pay close attention to the prospective vaccin, developed by Oxford University. After all, the vaccine could help the company ride out the current period of uncertainty with style.
The vaccine development is still in the clinical trials stage. Therefore, we cannot rule out the possibility that the vaccine might not work out in the end. However, the pharmaceutical giant is best known for its excellent cancer drug pipeline. Focusing on its core competency can still lead to better profits in the event when vaccines are no longer viable. Though, that will make the stock move closer to its intrinsic value. Shares of AstraZeneca have climbed more than 30% since the market sell-off in March and last traded at $51.47 on Friday’s close. The share price is currently trading at its all-time high levels. That said, is it still safe to buy AZN stock now considering its high valuation?
[Read More] 3 Stay-at-Home Stocks To Watch In 2020
Best Biotech Stocks To Buy [Or Avoid]: Moderna
Moderna Inc (MRNA Stock Report) saw their stock prices go up 300% in one year. The company, once the biggest biotech IPO in history, is now hailed as one of the leaders in the Covid-19 vaccine race. As such, MRNA stocks have skyrocketed following this sentiment. The company’s Covid-19 vaccine candidate, mRNA-1273 is the center stage of the company right now.
Moderna finished dosing the first participants in a phase 2 clinical study of the vaccine on May 29. The company has enrolled 300 healthy participants between the ages of 18 and 55. Following this vaccination, these participants will be followed for 12 months. I know what you are thinking right now. Does that mean it’s going to take a while for Moderna to proceed to the next stage? The answer is No. Because the company has laid out the details of its planned phase 3 study with the FDA. This shows the company’s initiative to begin a late-stage trial in July that is going to enroll 30,000 participants.
While the attention is all on the Covid-19 vaccine’s development, the company also has 22 other mRNA pipeline candidates, with 12 of them currently already in clinical studies. This shows that the company has other potential products under its pipeline. If mRNA-1273 doesn’t work out as planned, it will not be the end of the company.
Assuming Moderna’s vaccine candidate is ultimately successful, investors must also judge how others fare in their vaccine programs. If other companies stumble along the way and Moderna doesn’t, it would effectively make Moderna the monopoly. This, in effect, could alter the company’s bottom line in a big way. With all that being said, I do not expect MRNA stock to double or quadruple anytime soon, but the potential is definitely real. As such, would MRNA stock be a top biotech stock to buy right now?