[Editor’s note: “7 Biotech Stocks to Buy That Could Beat the Coronavirus” was previously published in February 2020. It has since been updated to include the most relevant information available.]
The coronavirus outbreak is a devastating event. It requires closing borders, avoiding large crowds and caring for those affected. And while some may hope for a vaccine or treatment, neither is likely in the short term.
For example, there is still no treatment for Middle East Respiratory Syndrome (MERS), a virus first identified in 2012. Severe Acute Respiratory Syndrome, which first infected humans in 2002, has no treatments either.
But thankfully the development of new medicine has advanced since those outbreaks. The scientific community and a host of drug companies have new approaches to developing treatments.
In light of that, here are seven biotech stocks that may one day have a coronavirus-beating product.
Biotech Stocks to Buy: Moderna (MRNA)
The Coalition for Epidemic Preparedness Innovations (CEPI) agreed to fund Moderna (NASDAQ:MRNA) to manufacture a vaccine against the coronavirus.
CEPI is a public-private coalition that supports the initiative of stopping future epidemics. This will give the Vaccine Research Center (VRC) of the National Institute of Allergy and Infectious Diseases (NIAID) and Moderna the resources to design a vaccine. NIAID will conduct a Phase 1 clinical study in the U.S.
CEPI selected Moderna because of its results from a Phase 1 clinical readout for its prophylactic vaccine. It has two more programs in development.
Moderna’s CEO Stéphane Bancel said, “We believe our mRNA vaccine technology offers potential advantages in the speed of development and production scalability, which positions Moderna to potentially develop a vaccine against coronavirus, 2019-nCoV.”
The firm has five candidate drugs in development that have potential commercial uses. For example, its respiratory syncytial virus (RSV) vaccine — what it calls mRNA-1777 and mRNA-1172 — may prevent future coronavirus outbreaks. Moderna also has an investigational Zika vaccine (mRNA-1893) that is in Phase 1. Recall that the Zika virus emerged most recently in 2015. Mosquitoes were its primary mode of virus transmission to people.
The average price target on Moderna stock is $32.86.
Crispr Therapeutics (CRSP)
Crispr Therapeutics (NASDAQ:CRSP) develops gene-editing therapy. It will not directly have a vaccine or treatment for coronavirus but it will play a central role in speeding up the process of identifying those affected.
This is extremely important in preventing its spread. Currently, the U.S. sends samples to the Centers for Disease Control and Prevention to identify an infection in a sample. The screening relies on polymerase chain reaction (PCR). But with Crispr, the Sherlock and Inspectr platforms are tailor-made solutions.
Getting the genome sequence of the virus will help scientists track the presence of any mutations. So, as diagnostic firms use Crispr-based screening, investors may expect the company’s revenue to grow significantly.
For now, along with its partner Vertex Pharmaceuticals (NASDAQ:VRTX), Crispr is relying on its Phase 1 and Phase 2 trials. This study assesses the safety and efficacy of gene-editing therapy CTX001 for treating blood disorders.
The preliminary data support Crispr’s belief that the therapy will cure patients suffering from transfusion-dependent beta thalassemia (TDT). The markets have already priced in the positive data of the study that involves one patient.
The study, known as CLIMB-Thal-111 is a TDT trial that will enroll up to 45 patients. The study will also follow patients for around two years after the initial treatment.
10 analysts who cover CRISPR stock have an average price target of $75.38, which implies 40% upside from its current share price.
Translate Bio (TBIO)
Translate Bio (NASDAQ:TBIO) is a clinical-stage messenger RNA (mRNA) therapeutics company. Its primary business is developing transformative medicines to treat diseases caused by protein or gene dysfunction.
Despite its huge potential, the markets are not currently pricing in the potential role TBIO might play in vaccine development for major viruses.
The company’s lead program “is an inhaled mRNA therapeutic in an ongoing Phase 1/2 clinical trial in patients with cystic fibrosis. Its preclinical programs are focused primarily on targets in additional pulmonary diseases and also include infectious disease targets for vaccine applications.”
Translate Bio formed a manufacturing agreement with Albany Molecular Research for mRNA manufacturing. So, if other biotech firms use mRNA as a means of delivering a coronavirus vaccine, the company may get involved.
With a market capitalization below $500 million, TBIO stock has inherently higher-than-average risks. The company’s cash balance increased steadily in the last few quarters, but operating expenses along with research and development costs are climbing. The company needs a product on the market that will bring in positive cash flow.
With no revenue in the books just yet, Translate Bio may not have the resources to fully participate in the development of a coronavirus vaccine.
Vir Biotechnology (VIR)
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Vir Biotechnology (NASDAQ:VIR) soared from $12 at the start of this year to as high as $34.27 this week. The buying frenzy is a direct result of speculators betting that the company would be the first to have a virus vaccine.
Vir has four technology platforms that are designed to stimulate and enhance the immune system. It currently has an antibody platform, a T Cell platform, an innate immunity platform and a siRNA (small interfering RNA) platform.
At a recent conference held in January 2020, Vir described itself as a clinical-stage immunology company seeking to treat and prevent serious infectious diseases.
Any of the four platforms may realistically give rise to an approach in treating the virus. Vir has siRNA, antibodies and T cells to work with. For example, its antibody research and innate immunity segment seek to treat respiratory diseases. This includes respiratory syncytial virus (RSV) and metapneumovirus (MPV).
Despite a market cap in the billions, Vir stock is risky. The company lost $4.60 a share in the third quarter. Revenue fell 51.4% year-over-year to $1.4 million. But investors cannot expect big revenue when much of it comes from grants. R&D costs rose to $39.9 million, up from $29.8 million the year before.
On Wall Street, price targets range from $17 to $26.
Johnson & Johnson (JNJ)
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Shares of Johnson & Johnson (NYSE:JNJ) took off in recent months, as it started developing vaccines to protect people from the new coronavirus. Its Janssen Pharmaceutical unit has technology that may also find success against Ebola, HIV and the Zika virus.
J&J said in a statement that “We began work on the current novel coronavirus vaccine two weeks ago, starting from a sequence we now know and are optimistic that we can start testing later this year.”
The conglomerate is in a good position to come up with a vaccine. So, it recently applied this technology to accelerate the development and manufacturing of an Ebola vaccine. Health authorities introduced the vaccine in November 2019.
The new vaccine may or may not work, since it has never been tested in the real world. Still, 50,000 people will get the vaccine in Goma, a city in the Democratic Republic of Congo.
JNJ’s Ebola vaccine development does not necessarily imply it will come up with a coronavirus vaccine. Coronavirus spreads differently and attacks the respiratory system, while Ebola attacks the immune system and different organs.
The average price target on JNJ stock is $161.25.
Gilead Sciences (GILD)
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Best known for developing medicines for viral hepatitis, Gilead’s(NASDAQ:GILD) Harvoni and Sovaldi are blockbuster drugs. On Jan. 31, the company said that it would supply a small number of Remdesivir to help patients fight coronavirus 2019-nCoV.
Gilead is repositioning the nucleotide inhibitor for coronavirus. But if the treatment did little to treat the Ebola virus, investors cannot be sure that it will work for the current outbreak.
Even so, Gilead is ahead of the others in the drug’s developmental stage. It already tested the drug in humans. Knowing the safety profile will allow the company to supply the product to those affected in China.
The New England Journal of Medicine reported that the first coronavirus case in the U.S. received the Remdesivir treatment. Seven days after the patient first entered the hospital, doctors tried Gilead’s product. On the eighth day, the patient’s condition improved.
Despite the fact that Gilead stock has been stuck in a narrow trading range, analysts have a $76.77 price target on GILD.
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Regeneron (NASDAQ:REGN) is better known for its two blockbuster drugs, Dupixent and Eylea. Dupixent treats asthma and atopic dermatitis, while Eylea treats age-related macular degeneration.
But Regeneron’s REGN3048 and REGN3051 are possible treatments for the coronavirus. NIAID is studying that option right now. Almost 50 subjects are involved in the safety and tolerability aspect of the study.
In a mouse model of MERS, the intravenous administration of the drug led to thee neutralization of MERS. Viral loads in the lungs fell.
Regeneron has laboratory experience in studying therapeutic antibodies for treating Ebola. VelociGene, VelocImmune and VelociMab antibody studies led to its cocktail treatment, REGN-EB3. What is this cocktail? The company describes REGN-EB3 as “a three-antibody cocktail designed with the goal of enhancing efficacy, reducing the development of viral sequences that lead to resistance, and increasing potential utility in future outbreaks as viruses continually evolve.”
As of this writing, Chris Lau did not hold a position in any of the aforementioned securities.
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