The world has shut down trying to avoid the coronavirus, or COVID-19. Individuals, companies and governments everywhere are getting hit hard where it hurts – in the wallet. Any company that can resolve the crisis in the form of prevention (a vaccine) or treatment stands to make windfall profits from immediate worldwide demand, not to mention an amazing boost for their brand and public relations. The following companies are in the race and here’s where they stand now.
Gilead Sciences, Inc. (NASDAQ: GILD) was first out of the gate to announce a possible treatment for COVID-19. On February 26, they launched two clinical studies using their antiviral medication, Remdesivir. On April 10, they announced a successful trial with the drug, stating that people with severe coronavirus symptoms showed “clinical improvement.” The stock responded by shooting up $10.50, or 14% over six trading days.
It seems that many investors read the headline without diving into the details; the results are dubious at best. 36 of 53 people who received the drug (68%) saw improvement after using the drug for 10 days – but that’s meaningless. Most people recover from the virus anyway. Furthermore, the trial was rushed: experts say using such a small number of patients with highly varied symptoms, no control group, minimal follow-up, and missing data on several patients all make the data inconclusive. Also, seven people died within four weeks and 10 people showed no improvement. Still, Remdesivir has emerged as the frontrunner in a world desperate for a cure. If you’re very sick with the virus, a drug that might help is better than nothing.
Based in Pennsylvania, Inovio Pharmaceuticals, Inc. (NASDAQ: INO) is a small company by comparison. They created a vaccine for COVID-19; now they need to find out if it works. (Who wants to be in the clinical trials for that? We’re going to infect you with the virus to see if our new vaccine works. What do you say? Take one for humanity.) On April 16, Inovio announced they received $6.9 million funding from the Coalition for Epidemic Preparedness Innovations (CEPI) to conduct the clinical trials for the vaccine, named INO-4800, in South Korea.
As of April 21, 2020, Inovio is one of only a few companies that are currently undergoing human trials for a potential COVID-19 vaccine. The clinical trials are taking place at the University of Pennsylvania Hospital. Inovio is also backed by the Bill and Melinda Gates Foundation.
Moderna, Inc. (NASDAQ: MRNA), another relatively small company, has created its own vaccine and they’re moving forward at full speed. The company gave the vaccine to their first patient on March 16. They hope to start a Phase-3 trial on the vaccine involving thousands of patients within six months. The company announced that the federal government has committed to give them $483 million to help develop the vaccine.
Two big players, GlaxoSmithKline (NYSE: GSK) and Sanofi (NASDAQ: SNY), announced they will be working together and leveraging each company’s expertise to develop a vaccine. Sanofi will work to identify an antigen required to make a vaccine using Glaxo technology. They have an optimistic timeline: the vaccine could be available to hundreds of millions of people by the end of 2021. If the pieces all come together, they have the resources to make it happen.
Tracking The COVID-19 Cure
The Milken Institute is tracking progress toward the cure to COVID-19. They currently report that 86 vaccines are being developed, in addition to 45 treatments involving anti-bodies, 20 anti-viral drugs, 9 cell-based therapies, 5 RNA-based treatments, and 47 other treatments.
How To Invest
A lot of very smart people are working on this; someone is going to find the cure. And when they do, the rewards will be great. However, there is no way to know who will win the race. Even the scientists and researchers themselves can’t answer that. It’s even possible that the virus will die out on its own, removing the immediate need to develop a cure. Trying to determine which company to invest in to score on the COVID-19 cure is a crapshoot.
I prefer to make investments based on solid reasoning, not luck. I invest in companies with steadily increasing sales and profits and a bright outlook. Investing this way offers better odds of success. Investing in any of these companies this early on feels too much to me like buying a lottery ticket, or betting on red or black. I’m going to stay on the sidelines on this one. Maybe you should, too.
Disclosure: The author, Gregg Killpack, Matt Rego or Spotlight Growth do not have any position or relationship with any companies mentioned in this article. This article should not be taken as a solicitation or recommendation to buy or sell any securities. Please conduct your own research and consult your financial advisor to determine your risk tolerance and investment path. We are not licensed brokers or investment advisors.
Article By: Gregg Killpack