Are These Biotech Stocks On Your Watchlist?
U.S. markets rallied higher on Monday led by a biotech stock after a breakthrough in the company’s Covid-19 vaccine development. Easing of lockdowns across certain states is also helping market sentiments. Trading for this week has all the characteristics of a rally focused on prospects for a return to normal. Meanwhile, the healthcare community focuses on one single important mission; treatment and vaccines. That said, the majority of the attention is on the hottest biotech stocks in the market. But the question is, how do these top biotech stocks stack up against each other?
This Could Be Just The Beginning For Biotech Companies
What’s the single most important factor to make money with biotech stocks? Being early. But that’s easier said than done. We can’t possibly pay attention to all the news out there in real time. But we can take note of the development of vaccines and important dates of the clinical data. That helps us in making certain bets on which biotech stocks to invest. Given the obvious sentiments about Covid-19, it doesn’t hurt to have some of the top biotech stocks on your watch list. While these aren’t cheap stocks, it’s up to you to decide if they are the best stocks to trade right now.
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Top Biotech Stocks To Watch #1: Moderna (MRNA)
The company that’s raging to the top today and gaining headlines is Moderna (MRNA Stock Report). The breakout of the MRNA stock came after it showed promise in early clinical trials with its vaccine candidate mRNA-1273. It has also gained FDA approval to begin phase 2 clinical trials. The results were very positive as the vaccine was able to stimulate the production of antibodies against Covid-19. The level of antibodies found were similar or higher than levels seen in patients who have recovered from the novel coronavirus.
Certainly, many are hopeful that this could be the vaccine for Covid-19. Yet, the preliminary findings came from only 8 patients. We usually want to see data from hundreds or even thousands of patients before a vaccine is proven effective. The stock jumped approximately 20% to $80 per share on Monday. In the last 3 months, the stock has jumped more than 300%. To put things into perspective, today’s jump in stock prices is small in comparison to what we would see if the vaccine is successful in late stage testing.
Top Biotech Stocks To Watch #2: Gilead Sciences (GILD)
Gilead Sciences (GILD Stock Report) has seen its stock price risen 19% since January lows. The stock is now ticking lower to $74.76 per share. There may be challenges for alternate formulations of the remdesivir drug to treat all Covid-19 patients. As you may recall, Gilead’s drug has shown respectable results in treating severely ill patients. Gilead will have to demonstrate that the treatment works for moderately ill patients as well. This group of patients could generate tangible cash flows for remdesivir, but that won’t come easy. We could have some data within a month on the efficacy of remdesivir in moderately ill Covid-19 patients. That would be a juicy piece of information for investors to pay attention to.
Gilead would still be a buy if you consider its long-term revenue potential. With no end in sight for the pandemic and the Covid-19 virus expected to become a seasonal illness like the flu, GILD stock has the potential to generate a decent return for investors. We must also remember that Gilead’s solid experience with HIV and viral hepatitis drugs could possibly make them one of the best biotech stocks to buy in the market, even if there’s a better alternative treatment for coronavirus. Will GILD stock still be among investors’ favourites?
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Top Biotech Stocks To Watch #3: Vir Biotech (VIR)
Another biotech company in focus is Vir Biotech (VIR Stock Report). The stock price soared on Monday, after it announced its Covid-19 publication in the journal Nature. What’s the fuss about the research paper? The paper details the identification of an antibody called S309, an antibody isolated from a patient who recovered from SARS in 2003. This research is promising because it prevents live Sars-Cov-2 virus from infecting cells. It is highly promising as the antibody could remain effective even if the virus evolves, at least according to Vir’s Chief Scientific Officer, Herbert Virgin.
The shares of VIR Biotech have soared more than 200% year to date. The company’s leading drug candidates for Covid-19 are known as VIR-7831 and VIR-7832, and both are based on S309. Vir is collaborating with GlaxoSmithKline (GSK Stock Report) in this promising project. They are expected to start clinical trials this summer. Maybe you are thinking, how to choose between the hundreds of biotech companies working on Covid-19? And that is a valid question. Certainly there is no bulletproof answer. But we can try to improve our odds. Perhaps we can look at a company’s track record, who is funding them, and who are their business partners. There remain hurdles in clinical trials and mass production, like the case of Gilead. Should investors be watching VIR stock from the sidelines?
