Should These High Growth Biotech Stocks Be In Your Portfolio?
Biotech stocks have been all over investors’ minds for obvious reasons. No doubt, we all know what the center of attention among the best biotech stocks to watch is. And that’s on potential vaccines, treatments, and news related to COVID-19. Many biotechnology companies are racing to find the vaccine for the novel coronavirus. But only six of them made it to phase 3 thus far.
If everything goes smoothly, we could expect to see at least one vaccine successfully rolling out before the end of the year. May it be Moderna (MRNA Stock Report), Pfizer (PFE Stock Report) or AstraZeneca (AZN Stock Report), it’s definitely not a winner takes all business. These top biotech stocks all stand a high chance to roll out their vaccines. And they might even see their stock prices skyrocketing. But the question is, can we expect them to be profitable?
Should Biotechnology Companies Profit From The Pandemic?
Many Democratic lawmakers have argued that federal funding for vaccine development should include provisions to guarantee affordability and guard against profiteering. A vaccine should be priced accordingly to the amount of money invested. And at the same time, it should be affordable in accordance with country-specific ability. For example, a $50 per vaccine may be cheap to developed countries, but definitely a sky-high price for underdeveloped countries. After all, what’s the point of having a successful vaccine when only the fortunate ones can afford it?
If biotech companies are really banned from profiteering, vaccine manufacturers might have to sell it just slightly above their cost price. And that could potentially hurt their earnings potential, making their current hyped-up market cap seems awfully overvalued. This is especially true for biotech companies who only have the COVID-19 vaccine as its only pipeline. Companies like AstraZeneca or Johnson & Johnson (JNJ Stock Report) probably wouldn’t see a huge dent in their stock prices should their vaccines fail to deliver. While some risk-averse investors like these well-diversified pharmaceutical stocks, some have a bigger risk appetite. And the latter group prefers single product biotech stocks. With that being said, are these the best biotech stocks to buy if you have a high-risk appetite?
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Best Biotech Stocks To Buy Or Sell: Sorrento Therapeutics
Shares of Sorrento Therapeutics (SRNE Stock Report) have been outperforming its industry peers. This is simply due to the expansion of the company’s coronavirus testing capacity and treatment pipeline. Since the coronavirus induced market sell-off in March, SRNE stock has climbed more than 1,000% before consolidation. This biotech company is well known for its plethora of experimental COVID-19 products, but is it worth the risks? You tell me. Sorrento has it all, developing antibody treatments, diagnostic tests, and vaccine candidates in the fight against COVID-19.
Last month, the company said it had licensed a test from Columbia University. The new coronavirus test reportedly detected the COVID-19 in little as 30 minutes. What’s more, the test uses saliva samples rather than unpleasant nasal swabs. The company is marketing the test under the name COVI-TRACE. This news contributed to another rally in Sorrento’s stock price recently.
After all, it is not surprising that investors are optimistic about the huge market opportunity for this diagnostic test. The company’s shares also rallied yesterday after it denied allegations that it fraudulently attempted to manipulate SRNE stock price.
Best Biotech Stocks To Buy Or Sell: Novavax
One of the hottest biotech stocks in the market, Novavax (NVAX Stock Report) are getting their investors all excited again. This came after the biotech company inked a COVID-19 vaccine deal with the U.K. for 60 million doses. Not only that, but Novavax also struck a development and supply deal with SK Bioscience, a subsidiary of South Korean giant SK Group.
We are proud to partner with SK Bioscience to fulfill our commitment to ensure the global supply of NVX-CoV2373,” Novavax CEO Stanley Erck said in a press release. “SK Bioscience shares our sense of urgency to ensure broad and equitable access for our COVID-19 vaccine candidate around the world.”
Despite rising more than 3,000% year-to-date, the vaccine candidate is only at phase 2. Amongst the biotech stocks under the Operation Warp Speed Program, Novavax had the most funding. Some may have seen Novavax as an underdog in the race for a COVID-19 vaccine thus far. But, this vote of confidence from the U.S. government speaks volumes for the company. But investors are also reminded to tread carefully if interested in buying NVAX stocks. With no products commercially available yet, it puts investors at an enormous risk should its vaccine fail to materialize.