Are These The Best Biotech Stocks To Buy For The Second Half Of 2020?
Biotech stocks have outperformed the broader market year to date. Biotech stocks have also proved to be one of the most interesting spaces to watch when it comes to massive breakouts overnight. This leads investors to look for top biotech stocks to buy in the stock market. For investors, there could be no better time to focus on the biotech industry that stands to see stock price gains during the pandemic.
As Dr. Anthony Fauci puts it; “There’s going to be more than one winner in the vaccine field”. Judging from the comment, this is not a winner-takes-all business. While the first biotech company to develop a safe and effective would still reward their investors handsomely, it won’t be the only company. There’s a great chance that a few other companies, may it be blue-chip or small-cap biotech, as long as they are able to treat patients without further side-effects. And needless to say, their stocks will also benefit.
Biotech stocks are inherently volatile in nature. Let’s not be clouded by risks and focus on the potentials instead. Like I said, companies that could find the first vaccine would see its profits soar. But we must also know that no companies could manufacture billions of doses in a short period of time. For this reason, it would be safer to expect a market with a number of biotech companies. That said, would companies on this list of top biotech stocks develop a safe and effective vaccine soon?
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Best Biotech Stocks To Buy [Or Sell]: Moderna
First, up the list, Moderna (MRNA Stock Report) is the front-runner in the race to develop the Covid-19 vaccine. However, the recent event has made MRNA stock under pressure lately. In light of the potential trial delay, MRNA stocks plunged by close to 10% over two trading days. The company, however, tweeted a reply insisting trials will start this month. But at this point, there’s no guarantee of that just yet. Moderna’s shares have soared by almost 200% year to date, mainly due to its efforts to develop a vaccine for COVID-19.
There appears to be some concern regarding the timeline for the potential approval of Moderna’s vaccine. The new guidelines for the approval of Covid-19 vaccines could slow the approval for Moderna’s vaccine candidate. The FDA said that a Covid-19 vaccine would need to show at least 50% efficacy in a placebo-controlled clinical trial while also spelling out other requirements. But should investors worry about a delay in the trial? Well, that depends on how long the delay is. In the end, this may turn out to be nothing but a minor obstacle for Moderna. If the company still manages to start its late-stage study sometime in July, or even in August, it would still be ahead of the vast majority of its competitors in this race.
Best Biotech Stocks To Buy [Or Sell]: Johnson & Johnson
Next up, Johnson & Johnson (JNJ Stock Report) is one of the best pharmaceutical stocks to watch in the stock market. It’s a broad portfolio of market-leading pharmaceuticals, medical devices, and consumer healthcare products that provide resilience to its businesses that are usually not seen in smaller rivals. Now, the company is also taking part in the Covid-19 vaccine race. This could generate additional interest in the stock, making it one of the top biotech stocks to watch in the market.
The company is poised to see steady revenue and earnings growth in the coming years. It has a strong late-stage pipeline with over 35 programs. Its top selling drugs, Imbruvica, Darzalex, and Stelara, have seen strong growth over the recent years. And this trend is likely to continue led by market share gains. Its new drug, Tremfya, has already become a blockbuster with sales of over $1 billion in 2019, and $296 million in Q1 2020. Should the company’s Covid-19 program bear fruit, it could be icing on the cake for investors.
Best Biotech Stocks To Buy [Or Sell]: Pfizer
Pfizer Inc. (PFE Stock Report) is another big pharma developing an RNA vaccine for SARS-CoV-2. The company is in partnership with Germany’s BioNTech SE (BNTX Stock Report) for this program. The partnership reported positive preliminary data from their Phase 1/2 trial of BNT162b1. This is the most advanced of four investigational vaccine candidates from the BNT162 RNA-based vaccine program.
The vaccine’s safety and tolerability are “consistent with what is expected,” and the data are “at least as good” as Moderna’s vaccine program, according to Jefferies analyst Michael Yee.
However, this was a small, early-stage test with just 45 participants. And the vaccine has not yet proven it can prevent Covid-19. To win full regulatory approval, the partners will likely have to run a large efficacy study in thousands of participants to demonstrate whether the vaccine prevents disease. Shall there be success in phase 3, Pfizer and BioNTech say they could produce up to 100 million doses by the end of 2020 and 1.2 billion doses by the end of 2021 for global distribution. Will this development drive sustained interest in PFE stock?