We are living through interesting times. Not an hour goes by when Americans don’t receive some reminder of the impact the coronavirus has on our lives. The race is on for an effective, FDA-approved treatment for the virus. Despite, vaccines being available for human trial in record time, we are many months away from having a viable vaccine.
However, we may be somewhat closer in finding some antiviral treatments. And if you’ve watched the market closely this week, any news on that front tends to move the market in a positive direction.
That brings up another truth of investing. There are some stocks that thrive from other stocks misery. And that’s why we’ve put together this special report. If you’re an investor who is looking to jump into this bear market, the pharmaceutical sector is a logical choice.
A combination of big-name drug companies as well as smaller startup companies are working around the clock to develop vaccines or treatments that will target the infection caused by the novel coronavirus.
Quick Links
- Teva Pharmaceutical
- Pfizer
- Regeneron
- Gilead Sciences
- GlaxoSmithKline
- Inovio
- Heat Biologics
- Johnson & Johnson
#1 - Teva Pharmaceutical (NYSE:TEVA)
Teva Pharmaceutical Industries Ltd. (TEVA) One of the most encouraging, but unproven, responses to treating the coronavirus came from Teva (NYSE:TEVA). The Israeli company announced its plans to donate six million tablets of the malaria drug hydroxychlorquine sulfate. The tablets are slated to arrive at U.S. hospitals by March 31. A total of 10 million tablets will be delivered within a month.
Using the drug to treat the coronavirus will be an off-label (i.e. unapproved) usage for the drug. However, based on evidence of some efficacy, the company is being asked to take this step. According to Teva spokeswoman Kelley Dougherty, officials from the U.S. Health and Human Services Department as well as the Food and Drug Administration (FDA) asked Teva about the feasibility of increasing shipments of hydroxychlorquine. President Trump has urged health authorities to expand its use.
“We’re directly responding to a need that was brought to us by the U.S. government,” Dougherty said. “This is a unique situation. We acknowledge that this is not currently for on-label use. But we are responding to the government and the promise that is being seen in the use of this product for Covid-19.”
Shares of Teva stock have surged over 14% since the news was released. However, the stock is still down over 25% in 2020.
About Teva Pharmaceutical Industries
Teva Pharmaceutical Industries Limited develops, manufactures, markets, and distributes generic medicines, specialty medicines, and biopharmaceutical products in North America, Europe, Israel, and internationally. It offers generic medicines in various dosage forms, such as tablets, capsules, injectables, inhalants, liquids, transdermal patches, ointments, and creams; sterile products, hormones, high-potency drugs, and cytotoxic substances in parenteral and solid dosage forms; and generic products with medical devices and combination products.
Read More - Current Price
- $17.03
- Consensus Rating
- Moderate Buy
- Ratings Breakdown
- 7 Buy Ratings, 2 Hold Ratings, 0 Sell Ratings.
- Consensus Price Target
- $19.67 (15.5% Upside)
#2 - Pfizer (NYSE:PFE)
Pfizer (PFE) and BioNTech SE (BNTX) - On the vaccine front, Pfizer (NYSE:PFE) announced a deal with the German company BioNTech SE (NASDAQ:BNTX) to co-develop and distribute a vaccine candidate for the coronavirus. Pfizer will be using BioNTech’s mRNA-based drug development platform. The agreement will exclude distribution in China. The plan is for the vaccine to go into U.S. and German clinical trials in late April.
The coronavirus vaccine is the latest example of the partnership between the two companies who have worked together in the past to develop mRNA-based influenza vaccines.
Leveraging expertise and resources of both companies" said BioNTech and Pfizer in a statement, the "collaboration aims to accelerate global development of BNT162," with cooperation beginning immediately, and clinical testing to begin in late April 2020. From start of testing to eventual approval (one hopes), could take perhaps 12 to 18 months.
Separately, BioNTech also made a deal to collaborate with Shanghai Fosun Pharmaceutical on an experimental vaccine that will be begin human testing in China in April.
Shares of BioNTech are up 54% for the year. Pfizer stock is down over 20% in 2020.
About Pfizer
Pfizer Inc discovers, develops, manufactures, markets, distributes, and sells biopharmaceutical products in the United States, Europe, and internationally. The company offers medicines and vaccines in various therapeutic areas, including cardiovascular metabolic, migraine, and women's health under the Eliquis, Nurtec ODT/Vydura, Zavzpret, and the Premarin family brands; infectious diseases with unmet medical needs under the Prevnar family, Abrysvo, Nimenrix, FSME/IMMUN-TicoVac, and Trumenba brands; and COVID-19 prevention and treatment, and potential future mRNA and antiviral products under the Comirnaty and Paxlovid brands.
Read More - Current Price
- $24.95
- Consensus Rating
- Moderate Buy
- Ratings Breakdown
- 7 Buy Ratings, 8 Hold Ratings, 1 Sell Ratings.
- Consensus Price Target
- $32.92 (32.0% Upside)
#3 - Regeneron (NASDAQ:REGN)
Regeneron (NASDAQ:REGN) and Sanofi currently collaborate on Kevzara (for the treatment of rheumatoid arthritis) and Praluent (for the treatment of high cholesterol). The drug is being evaluated for its potential use in helping reduce inflammation in the lungs for patients with more severe cases of the coronavirus. The company anticipates receiving initial results within a few weeks of when patients become enrolled in the Kevzara study.
Regeneron is working separately on a “cocktail” of viral-neutralizing antibodies. The company believes that clinical testing could begin in early summer. “In order to meet the pressing public health need, Regeneron is applying its VeociMab technology to prepare manufacturing-ready cell line as lead antibodies are selected, so that clinical-scale production can being immediately,” a company spokesperson said.
If effective, it’s possible the cocktail can be administered prior to exposure to protect against infection. "The company is working toward the goal of producing hundreds of thousands of prophylactic doses per month by the end of summer and hopes to have smaller quantities available for initial clinical testing at the beginning of the summer."
Shares of REGN stock are up over 25% in 2020.
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 - Gilead Sciences (NASDAQ:GILD)
Gilead Sciences Inc. (GILD) - One of the world’s best known pharmaceutical companies, Gilead Sciences (NASDAQ:GILD) is currently testing the effectiveness of its pneumonia drug, remdesivir, as a treatment for the coronavirus. Gilead is conducting worldwide trials. Although the majority of these trials are in the United States, there are three sites in Singapore and South Korea as well as a randomized, controlled clinical trial in Wuhan, China. The trial will end on April 1 with results coming in May.
In a nod to the speculative nature of what is happening right now, shares of Gilead stock soared nearly 10% when President Trump stated that remdesivir was “essentially approved”. However, the stock has since come off those highs after FDA commissioner Stephen Hahn said testing was not complete, particularly as it related to dosage. Having the right drug, but the wrong dose “can cause more harm than good,” said Hahn at the White House briefing.
Shares of Gilead stock are up over 20% in 2020. GILD is one of the few stocks that have been rising as the broader market is selling off.
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)
#5 - GlaxoSmithKline (NYSE:GSK)
GlaxoSmithKline (GSK) - Another company experimenting with a coronavirus vaccine is GlaxoSmithKline (NYSE:GSK). However, GlaxoSmithKline is not a pure play on the vaccine front, at least not for the coronavirus. The company is partnering with the Coalition for Epidemic Preparedness Innovations (CEPI) to lend its vaccine adjuvant platform technology to any company that is working on a vaccine.
An adjuvant is used to enhance or augment the effects of a vaccine by boosting the immune system. This, in turn, makes the immune system respond more vigorously to a vaccine, providing increased immunity.
Glaxo is also partnering with the Chinese biotech company Clover Pharmaceuticals to allow its adjuvant technology to be used with the company’s vaccine candidate, Trimer.
Because the company is more indirectly involved in the battle against the coronavirus, it’s stock has not seen the same benefit as other pharmaceutical stocks. Shares of GSK stock are down over 17% for the year. However, value investors should still be attracted to the company’s dividend which is up over 6% since the stock’s recent decline.
About GSK
GSK plc, together with its subsidiaries, engages in the research, development, and manufacture of vaccines, and specialty and general medicines to prevent and treat disease in the United Kingdom, the United States, and internationally. It operates through two segments, Commercial Operations and Total R&D.
Read More - Current Price
- $33.36
- Consensus Rating
- Moderate Buy
- Ratings Breakdown
- 3 Buy Ratings, 7 Hold Ratings, 0 Sell Ratings.
- Consensus Price Target
- $43.25 (29.6% Upside)
#6 - Inovio (NASDAQ:INO)
Inovio (NASDAQ:INO) is a cautionary tale about why being first is not necessarily best when it comes to a vaccine. Inovio was one of the first companies to announce that it had a potential vaccine for the coronavirus. And Inovio has received a $5 million grant from CEPI to fund its preclinical and phase 1 clinial testing of its vaccine. Inovio expects the trial to start in April and is forecasting one million doses to be available by the end of the year.
That’s the good news. The more troubling news for investors is that the nature of vaccines is that not all of them are effective. And, even if they are, there’s no guarantee that Inovio will be the first to market. Both of these are headwinds on the stock. However, investors are buying Inovio because it is a growth stock. And it does have other drugs in its pipeline.
About Inovio Pharmaceuticals
Inovio Pharmaceuticals, Inc, a biotechnology company, focuses on the discovery, development, and commercialization of DNA medicines to treat and protect people from diseases associated with human papillomavirus (HPV), cancer, and infectious diseases. Its DNA medicines platform uses precisely designed SynCon that identify and optimize the DNA sequence of the target antigen, as well as CELLECTRA smart devices technology that facilitates delivery of the DNA plasmids.
Read More - Current Price
- $3.97
- Consensus Rating
- Moderate Buy
- Ratings Breakdown
- 3 Buy Ratings, 2 Hold Ratings, 0 Sell Ratings.
- Consensus Price Target
- $38.00 (857.2% Upside)
#7 - Heat Biologics (NYSE:NHWK)
If you’re interested in taking a flier on a penny stock, a candidate may be Heat Biologics (NASDAQ:HTBX). HTBX stock is up nearly 30% for the year. The reason is that it’s coronavirus vaccine candidate has been added to the World Health Organization’s (WHO) “draft landscape” of candidate vaccines. That makes Heat one of 41 possible vaccines in development.
Being one of 41 candidates is unremarkable. Like Inovio, there is no guarantee that Heat’s vaccine will pass muster. However, the company did join the Alliance for Biosecurity. Joining the alliance may help Heat “secure government funding to support its rapid development, production and distribution” of its coronavirus vaccine.
But the WHO designation will also benefit Heat for another reason. The United States government is pledging to throw $8 billion dollars to fight the spread of the virus. That money isn’t going to be sent to companies with unproven technologies. Being on the WHO list of approved vaccines makes it more likely that Heat will be a beneficiary.
About NightHawk Biosciences
NightHawk Biosciences, Inc, an integrated biopharmaceutical company, develops, manufactures, and commercializes medical countermeasures that combat unmet and emerging biothreats. The company develops ANTHIM (obiltoxaximab), a monoclonal antibody antitoxin for the treatment of inhalational anthrax. The company was formerly known as Heat Biologics, Inc and changed its name to NightHawk Biosciences, Inc in May 2022.
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
#8 - Johnson & Johnson (NYSE:JNJ)
The last company we want to bring to your attention is Johnson & Johnson (NYSE:JNJ). The company is still identifying a potential vaccine candidate. Like GlaxoSmithKline, JNJ initially is focusing on using its existing AdVac and PER.C6 technologies to improve the development process for a vaccine. Dr. Paul Stoffels, J&J’s chief scientific officer said in a statement, “…if we have a vaccine candidate with potential, we aim to make it accessible to China and other parts of the world.”
However, Johnson & Johnson is also preparing its own vaccine. The company is planning to have its candidate vaccine into a Phase 1 clinical trial by the end of the year. In February, the company announced it is working with BARDA to test its vaccine candidate with both organizations providing funding for research and development. Even though other companies have been faster to bring a vaccine to clinical trial, don’t sleep on the ability of Johnson & Johnson to be one of the primary vaccines in the future.
Shares of Johnson & Johnson are down over 14% in 2020.
About Johnson & Johnson
Johnson & Johnson, together with its subsidiaries, researches, develops, manufactures, and sells various products in the healthcare field worldwide. The company's Innovative Medicine segment offers products for various therapeutic areas, such as immunology, including rheumatoid arthritis, psoriatic arthritis, inflammatory bowel disease, and psoriasis; infectious diseases comprising HIV/AIDS; neuroscience, consisting of mood disorders, neurodegenerative disorders, and schizophrenia; oncology, such as prostate cancer, hematologic malignancies, lung cancer, and bladder cancer; cardiovascular and metabolism, including thrombosis, diabetes, and macular degeneration; and pulmonary hypertension comprising pulmonary arterial hypertension through retailers, wholesalers, distributors, hospitals, and healthcare professionals for prescription use.
Read More - Current Price
- $153.10
- Consensus Rating
- Moderate Buy
- Ratings Breakdown
- 8 Buy Ratings, 7 Hold Ratings, 0 Sell Ratings.
- Consensus Price Target
- $175.94 (14.9% Upside)
The sooner there is a viable treatment for the coronavirus, the sooner we will all begin to see life return to whatever our new normal will be. For some of the companies listed in this presentation, any boost they receive in these next few months may be short-lived. Other companies are among the finest in the pharmaceutical sector.
Right now investors are looking to find whatever green shoots they can find. And these pharmaceutical companies are hiding in plain sight.
However, there is a reason many of these stocks have such a low price. They are speculative stocks in the best of times. While it’s very important that the world’s leading companies develop vaccines and other treatments for the coronavirus quickly. Fast, and effective, are two different things. Any of these companies may be a long-term winner. But some of them may not be.
If you choose to add one or more of these stocks to your portfolio take care to monitor them carefully and set stop losses because they may move quickly as the race for a coronavirus cure continues.
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