Are These Biotech Stocks Worth The Investment?
The coronavirus outbreak has been a major theme in the stock market for the past few months. And because of that, biotech stocks have been the star players of the stock market today. Now that we have more than 10 million confirmed cases and surpassed half a million in death toll, the need for safe and effective vaccines and treatments are more important than ever. Investors bet on companies working on treatment and prevention. And some stocks, particularly of companies in clinical stages, have skyrocketed.
Just yesterday, pharma major Bharat Biotech announced India’s first vaccine candidate for Covid-19. The vaccine candidate is the result of collaboration with the Indian Council of Medical Research (ICMR)- National Institute of Virology (NIV). This led investors looking for the best biotech stocks to buy or “Bharat stock”. Here’s the thing, the latter is not available as the company is not publicly listed, to begin with. But what I also want you to know is, the process of human clinical trials varies between different jurisdictions. Some retail investors put their money in an investment the minute they stumble upon a major headline. Soon after they digest the details, they might find out that it’s actually not that big a deal. I don’t blame them though, I blame social media.
Pharmaceuticals and biotech stocks have been propelled into the spotlight. The urgent need for a solution to the coronavirus and to get the world back to normal means the industry is being pressured to work at a highly ambitious pace. Now the question is whether it’s too late to invest in biotech stocks. Of course, it depends on which ones. With all that in mind, how do these 2 biotech stocks stack up against each other?
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Best Biotech Stocks To Buy Now [Or Sell]: Moderna
First, up the list, Moderna (MRNA Stock Report) is the most discussed biotech stock on Wall Street. The company’s rapid progress in advancing its vaccine candidate into clinical studies has been impressive. As a result, MRNA stock has jumped more than 200% year to date. After such an impressive rally, investors began to wonder if MRNA stock is in a bubble that is about to pop. Considering now the market cap stands at around $24 billion, a staggering level for a company with no approved product for sale. The risk is certainly there.
As such, we also need to evaluate the company’s potential. In particular, investors should focus on the prospects of Moderna’s mRNA vaccine candidate. Some speculate that Moderna will be one of the first to successfully develop a vaccine. But as good as the speculation can be, it doesn’t exactly provide much reassurance to potential investors. Assuming the vaccine turns out to be successful and wins regulatory approvals, MRNA stock will be flying to the moon. And if it doesn’t, MRNA stock could collapse in a heartbeat. That is why MRNA stock is your ultimate risk/reward play in the biotech space. The question for you is then really about your investment style.
Best Biotech Stocks To Buy Now [Or Sell]: Gilead Sciences
By now, we should all know the existence of Gilead Sciences’s (GILD Stock Report) Covid-19 drug, remdesivir. And if you don’t already know it, the company just announced the drug’s price tag of $3,120 for typical patients. While results from clinical trials of remdesivir have been positive, the stock has failed to break out of a trading range in the mid $70s for a prolonged period of time.
With Gilead now providing clarity on pricing and other recent developments discussed, it might be time for GILD to break out from its upper resistance level. That depends on the market’s reaction to pricing news. But investors haven’t been kind to Gilead. Allegations of profiteering were already in play with remdesivir as the company had previously applied for orphan drug designation at a time when there were a lower number of cases. Now that we have a price tag, if GILD stock fails to have a breakout, does that mean that investors are not comfortable with the price tag? Or is it because they don’t think the drug could actually be profitable in the end? In any case, Gilead has a fairly sizable portfolio of products. Therefore, the performance of GILD stock will not be solely reliant on remdesivir alone.