Why Moderna Is Clearly Pulling Ahead In The COVID Vaccine Race

[Updated 5/15/2020] Moderna’s Recent Progress

Moderna has made significant progress with its Coronavirus vaccine candidate – mRNA-1273 – in recent weeks, as it gained FDA approval to begin phase 2 clinical trials while noting that it was finalizing the protocol for a phase 3 study, which is expected to begin early summer. This is ahead of the fall timeline previously anticipated for phase 3 trials. Separately the experimental vaccine has also received fast-track designation from the U.S. FDA, essentially helping to speed up the regulatory process. At this rate, the company could be on track to win full approval for the vaccine by next year. This puts Moderna well ahead of rivals in the clinical trial timeline – rival biotech Inovio’s candidate is in phase 1, while many other U.S. based players remain in the pre-clinical phase. Moderna has also announced a collaboration with Switzerland based Lonza Group for manufacturing its vaccine, producing as much as 1 billion doses each year.

Our indicative list of 7 U.S. listed companies working on Coronavirys vaccines, which includes Moderna, Inovio and others have returned 200% YTD return on an equally weighted basis. For more details on these stocks and their financials, view Trefis Theme: Coronavirus Vaccine Portfolio

[Updated 4/23/2020] An Overview of  Coronavirus Vaccine Stocks

While the markets have tumbled due to the spread of the novel coronavirus, stocks of pharma companies developing vaccines and treatments for the highly contagious viral infection have fared well. Although vaccine bets still remain quite speculative, considering that most companies are either in the pre-clinical or phase 1 stage of trials for their candidates, companies could see significant upside if they develop a safe, effective, and relatively affordable vaccine. For instance, the potential addressable market for a vaccine could stand at 7.5+ billion (the worldwide population) versus ~2.5 million currently for potential coronavirus therapeutics. Our indicative portfolio of 7 U.S. listed companies developing vaccines for Coronavirus has gained a whopping ~130% year-to-date on an equally weighted basis.

While the stocks of smaller, specialized players such as Inovio Pharmaceuticals and Moderna have rallied by ~250% and ~160% respectively year to date, as both companies already have candidates in Phase 1 trials, these companies also have a much higher risk, given their very limited revenue streams. On the other hand, big pharma companies such as Johnson & Johnson (up 5% year to date) and Sanofi (down 4%), who remain in the pre-clinical stage, could offer better downside protection, given their highly diversified revenue streams. For more details on the stock price and fundamental performance of some of the key U.S. listed companies developing a coronavirus vaccine, view our  COVID Vaccine Portfolio

Moderna (+160% YTD return, $16.8 billion market cap): Moderna was the first to begin phase 1 clinical trials for its RNA-based vaccine. The company is expected to receive as much as $483 million in U.S. federal government funding for its vaccine development. Moderna says that it could begin phase 2 trials as early as Spring 2020, with phase 3 trials potentially starting as early as the Fall.

Inovio Pharmaceuticals (+255% YTD return, $1.7 billion market cap): Inovio, a small biotech company started phase 1 clinical trial for a DNA-based novel coronavirus vaccine earlier this month. While the company is ahead of larger firms in getting to human trials for its vaccine candidate, it could remain a speculative bet for investors, given its relatively limited revenue streams (just $4 million in revenue over 2019).

Novavax (440% YTD return, $1.1 billion market cap): Novavax, a company that focuses on vaccines for infectious diseases, has indicated that it has a vaccine candidate called NVX-CoV2373 that has demonstrated effectiveness against the coronavirus in pre-clinical trials. That said, the stock could have significant downside risk as well, as the company does not have any other products in the market, besides a flu vaccine that is in the late stages of development.

Johnson & Johnson (+5% YTD return, $390 billion market cap): The pharmaceutical giant could begin phase 1 trials for its coronavirus vaccine by September 2020, at the latest. The company could have a leg up over rivals in terms of production capacity and distribution reach, as it says it would be able to produce as much as 900 million doses by early 2021. Moreover, the company is also working on antiviral treatments against the coronavirus.

Sanofi (-4% YTD return, $120 billion market cap): Sanofi has joined forces with GlaxoSmithKline to develop a coronavirus vaccine. While Sanofi will contribute the antigen, GSK will provide its pandemic adjuvant technology, which helps to reduce the amount of vaccine protein required per dose. Sanofi also has exposure to potential COVID-19 treatments, as the company makes the malaria drug hydroxychloroquine, which is being viewed as a possible treatment, while also testing another treatment in partnership with Regeneron.

Are treatments, vaccines or testing stocks the best way to play the coronavirus recovery? View our indicative themes Coronavirus Treatment Stocks, and Coronavirus Testing Stocks for more details on the stock price and fundamental performance of some of the key U.S. listed companies.

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