October 2, 2020, may not rank as one of those “where were you when” moments. But when news broke that the President of the United States and the First Lady tested positive for the novel coronavirus, there was certainly a sense that we were living through a historical moment (as if we already were not).
Over the following days, several biotech and pharmaceutical companies took the headlines. However, these weren’t the vaccine stocks that investors have committed to memory. These were companies that are leading the race for antiviral therapeutics.
And with a very high profile proof of concept, therapeutics may have had their moment. It’s far too early to say whether these drugs truly carry the answer. But from the outset of the pandemic, there has been a feeling that therapeutics may carry the ultimate solution to neutralizing the most severe effects of the novel coronavirus.
As you might expect, there is no shortage of companies in the therapeutic discussion. In this special presentation, we’re highlighting seven companies that you should be paying close attention to. If therapeutics nudge ahead of a vaccine, these stocks are likely to make strong upward moves.
Quick Links
- Gilead Sciences
- AbbVie
- Regeneron
- Eli Lilly
- Co-Diagnostics
- Humanigen
- ChromaDex
#1 - Gilead Sciences (NASDAQ:GILD)
Gilead Sciences (NASDAQ:GILD) is in the headlines for its therapeutic antiviral treatment called remdesivir. Gilead stock is essentially flat for the year, but investors have been on quite the ride. In the six weeks from the onset of the extreme mitigation efforts to the end of April, GILD stock charged ahead by 22%. But it’s since given up most of those gains.
Part of the reason for this is that the race for a vaccine took center stage, and it pulled investor attention away from therapeutics. And also, remdesivir was not seen as being an all-in-one solution for Covid-19. But if there’s anything the President’s treatment is showing it’s that remdesivir may still have a role to play as one of several therapeutic solutions.
But investors should be attracted to Gilead for other reasons. The company has an established pipeline that is not dependent on treating the novel coronavirus. And it also pays a respectable dividend.
About Gilead Sciences
Gilead Sciences, Inc, a biopharmaceutical company, discovers, develops, and commercializes medicines in the areas of unmet medical need in the United States, Europe, and internationally. The company provides Biktarvy, Genvoya, Descovy, Odefsey, Truvada, Complera/ Eviplera, Stribild, Sunlencs, and Atripla products for the treatment of HIV/AIDS; Veklury, an injection for intravenous use, for the treatment of COVID-19; and Epclusa, Harvoni, Vemlidy, and Viread for the treatment of viral hepatitis.
Read More - Current Price
- $88.63
- Consensus Rating
- Moderate Buy
- Ratings Breakdown
- 14 Buy Ratings, 11 Hold Ratings, 0 Sell Ratings.
- Consensus Price Target
- $94.00 (6.1% Upside)
#2 - AbbVie (NYSE:ABBV)
One thing that scientists are discovering is that established antivirals are proving to have some effect on the novel coronavirus. That’s the case with AbbVie (NYSE:ABBV). The company’s HIV treatment, Kaletra (also called Aluvia) is being used in China to treat pneumonia that patients experience due to the coronavirus. Kaletra has not been approved as an approved treatment for the virus, but it has a history of being effective.
In 2004, a clinical study proved that the drug was an effective treatment for SARS (Sudden Acute Respiratory Syndrome). AbbVie is literally putting its own money into the game. The company has donated nearly $1.5 million worth of the drug to China. If the drug is proven to be effective over a large patient population, Kaletra could be a billion-dollar drug for AbbVie.
ABBV stock is down about 3% for the year, which makes this a nice buying opportunity, particularly when you consider that you’re getting a company with an established pipeline and a reliable dividend confirmed by its membership in the exclusive Dividend Aristocrat club.
About AbbVie
AbbVie Inc discovers, develops, manufactures, and sells pharmaceuticals worldwide. The company offers Humira, an injection for autoimmune and intestinal Behçet's diseases, and pyoderma gangrenosum; Skyrizi to treat moderate to severe plaque psoriasis, psoriatic disease, and Crohn's disease; Rinvoq to treat rheumatoid and psoriatic arthritis, ankylosing spondylitis, atopic dermatitis, axial spondyloarthropathy, ulcerative colitis, and Crohn's disease; Imbruvica for the treatment of adult patients with blood cancers; Epkinly to treat lymphoma; Elahere to treat cancer; and Venclexta/Venclyxto to treat blood cancers.
Read More - Current Price
- $167.74
- Consensus Rating
- Moderate Buy
- Ratings Breakdown
- 18 Buy Ratings, 3 Hold Ratings, 0 Sell Ratings.
- Consensus Price Target
- $203.37 (21.2% Upside)
#3 - Regeneron (NASDAQ:REGN)
Regeneron (NASDAQ:REGN) is making news for its part in treating President Trump. However, that is only part of the story. Regeneron first made news by announcing it was working with Sanofi (NYSE:SNY) to test Kevzara – which is used to treat rheumatoid arthritis – as a potential treatment for boosting the immune system of Covid-19 patients. Unfortunately, the companies experienced disappointing results in its Phase 2 trial.
However, Regeneron was already working on a separate project. This was the “cocktail” that President Trump received. The antiviral cocktail, REGN-COV2, only began clinical trials in June. So even though President Trump’s initial immune response appears favorable, it’s far too early to tell if this treatment will receive FDA approval. Nevertheless, the company is getting more requests via the FDA’s “compassionate use” authorization.
REGN stock is up 56% for the year but is only up 3% on news of President Trump’s treatment. This is consistent with the company’s history in which the company has shown a strong average annual revenue growth of 22%, but it has not translated into the company’s stock price.
About Regeneron Pharmaceuticals
Regeneron Pharmaceuticals, Inc discovers, invents, develops, manufactures, and commercializes medicines for treating various diseases worldwide. The company's products include EYLEA injection to treat wet age-related macular degeneration and diabetic macular edema; myopic choroidal neovascularization; diabetic retinopathy; neovascular glaucoma; and retinopathy of prematurity.
Read More - Current Price
- $743.35
- Consensus Rating
- Moderate Buy
- Ratings Breakdown
- 18 Buy Ratings, 4 Hold Ratings, 1 Sell Ratings.
- Consensus Price Target
- $1,099.55 (47.9% Upside)
#4 - Eli Lilly (NYSE:LLY)
On the heels of Regeneron’s drug cocktail, Eli Lilly (NYSE:LLY) is applying for an emergency use authorization (EUA) for its coronavirus antibody treatment. The company’s experimental antibody, Y-CoV555 is currently in the trial stage. However, the company has documented that the treatment is reducing the number of patients who need to be hospitalized or seek emergency room treatment for moderate Covid-19 symptoms. The antiviral, which is administered through an IV, is said to be similar to Regeneron’s cocktail.
Eli Lilly has a separate rheumatoid arthritis drug, baricitinib, which it is developing in a partnership with Roche (OTCMKTS:RHHVF). This drug has been tested in combination with Gilead’s remdesivir to speed the recovery of Covid-19 patients.
Like several of the company’s in this presentation, there is more to like about Eli Lilly for more than just its work on the Covid-19 front. The company has a drug, tirzepatide, in its pipeline. The drug is in a late-stage (Phase 3) trial for the treatment of diabetes, obesity, and cardiovascular outcomes. One analyst told Barron’s that the drug could deliver $3.7 billion of sales by 2025.
LLY stock is up almost 12% for the year. Investors can also collect a nice dividend for their investment.
About Eli Lilly and Company
Eli Lilly and Company discovers, develops, and markets human pharmaceuticals worldwide. The company offers Basaglar, Humalog, Humalog Mix 75/25, Humalog U-100, Humalog U-200, Humalog Mix 50/50, insulin lispro, insulin lispro protamine, insulin lispro mix 75/25, Humulin, Humulin 70/30, Humulin N, Humulin R, and Humulin U-500 for diabetes; Jardiance, Mounjaro, and Trulicity for type 2 diabetes; and Zepbound for obesity.
Read More - Current Price
- $753.41
- Consensus Rating
- Moderate Buy
- Ratings Breakdown
- 17 Buy Ratings, 4 Hold Ratings, 0 Sell Ratings.
- Consensus Price Target
- $1,007.94 (33.8% Upside)
#5 - Co-Diagnostics (NASDAQ:CODX)
Co-Diagnostics (NASDAQ:CODX) is one of the small-cap stocks that is rewarding investors in 2020. The keyword is testing. Co-Diagnostics has a rapid response test for the novel coronavirus that has been proven to deliver fewer false positives. The kit is also proving effective at catching mutations of the virus.
The stock has been surging since the FDA granted the test kit emergency use authorization in April. Co-Diagnostics was also the first U.S. company to get approval for its test kit from the European Union.
There is a sense that CODX stock may have priced in all of the good news. The stock is down over 50% since August. However, the stock is up 24% in the last month. This suggests that investors are buying into the notion that a vaccine won’t be delivered until early next year at the earliest. If that is the case, the need for testing will remain one of the key strategies for tracking the virus.
About Co-Diagnostics
Co-Diagnostics, Inc, a molecular diagnostics company, develops, manufactures, and sells reagents used for diagnostic tests that function through the detection and/or analysis of nucleic acid molecules in the United States and internationally. The company offers Co-Dx PCR platform, a polymerase chain reaction (PCR) testing to patients in point-of-care and at-home setting.
Read More - Current Price
- $1.04
- Consensus Rating
- Hold
- Ratings Breakdown
- 0 Buy Ratings, 1 Hold Ratings, 0 Sell Ratings.
- Consensus Price Target
- $1.50 (44.2% Upside)
#6 - Humanigen (NASDAQ:HGEN)
Humanigen (NYSE:HGEN) is a small-cap that may be flying under your radar. It shouldn’t be anymore. As scientists have come to learn more about the novel coronavirus, it is clear that it is important to avoid patients having a cytokine storm. This is basically the body having an aggressive inflammatory response to the novel coronavirus.
Humanigen has a drug candidate, lenzilumab, which is focused on preventing such events from happening. With President Trump’s diagnosis putting cytokine storm in the headlines, the company is initiating a public stock offering of 8 million shares of common stock. The offering is being underwritten by JP Morgan Chase (NYSE:JPM) and Jefferies (NYSE:JEF). The company says it will use the funds, in part, to support the manufacturing, product, and commercial preparation of the drug.
HGEN stock is up over 500% for the year but was up even higher. In early July, the stock was up over 1,000%. It’s obviously come down with more talk of a vaccine, but the stock is up nearly 50% in the last month.
About Humanigen
Humanigen, Inc, a clinical-stage biopharmaceutical company, focuses on preventing and treating an immune hyper-response. The company is developing lenzilumab, an antibody that binds to and neutralizes granulocyte-macrophage colony-stimulating factor (GM-CSF), to treat cytokine storm associated with COVID-19 for which it has completed a Phase 3 study and is the focus of a Phase 2/3 study sponsored by the NIH.
Read More - Current Price
- $0.00
- Consensus Rating
- N/A
- Ratings Breakdown
- 0 Buy Ratings, 0 Hold Ratings, 0 Sell Ratings.
- Consensus Price Target
- N/A
#7 - ChromaDex (NASDAQ:CDXC)
We conclude this presentation by looking at ChromaDex (NASDAQ:CDXC). This small-cap is up 20% for the year. Although it hasn’t been immune from the ups and downs of the market, CDXC has been less volatile than other biotech stocks.
One of the known risk groups for the novel coronavirus is the nation’s senior citizens, particularly those over the age of 70. Scientists have long looked at the role of nutrition in our ability to fight off viruses. ChromaDex is involved in the development of aging-related neutraceuticals. While the company is not a pure-play on the novel coronavirus, it has recently released the results of a study that shows how patients that were taking its nutritional protocol in addition to the standard of care saw a nearly 30% reduced recovery time from Covid-19.
One of the nice things about the company’s flagship product, TRU NIAGEN, is that it has significant intellectual property (IP) protection. This means that the company has little to no risk of having its product suffer patent infringement.
About ChromaDex
ChromaDex Corporation operates as a bioscience company focusing on developing healthy aging products. The company operates through three segments: Consumer products; Ingredients; and Analytical Reference Standards and Services. It researches nicotinamide adenine dinucleotide (NAD+); provides finished dietary supplement products that contain its proprietary ingredients directly to consumers and distributors; and develops and commercializes proprietary-based ingredient technologies and supplies these ingredients as raw materials to the manufacturers of consumer products.
Read More - Current Price
- $7.50
- Consensus Rating
- Buy
- Ratings Breakdown
- 2 Buy Ratings, 0 Hold Ratings, 0 Sell Ratings.
- Consensus Price Target
- $8.00 (6.7% Upside)
The world is waiting to return to normal. There’s nothing wrong with that. It’s simply human nature. We were meant to be social beings. If we’re realistic, we know that the novel coronavirus is likely to be around for a long time.
However, the good news is that the best and brightest scientists know more about the virus. This is allowing them to confirm some suspicions. It also means that maybe all of our efforts to keep our distance have provided the time needed for companies to create new pathways to successful treatment.
And this is creating a tremendous opportunity for investors who are paying attention. Investing in these seven stocks is one way to ensure you’re taking advantage of it.
One thing that we can be extremely proud of is the way many of our nation’s leading biotech companies are working together to find solutions to this virus. Use your MarketBeat subscription to get alerts on breaking news surrounding these and other companies on your watch list.
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