You could play it safe. Put your money in assets that probably won’t lose their value. Perhaps you could choose to buy shares of utility companies that enjoy monopolies.
But not all investors want to take the safe path that will lead to smaller long-term returns. Even normally risk-averse investors may want to take a walk on the wild side from time to time buying stocks that have the potential to generate delicious returns in a short period of time.
If you are one of those types of investors, consider biotech stocks with promising COVID-19 programs. If the candidates in their portfolio are successful, these companies could make a lot of money relatively quickly. Here are three stocks of coronaviruses that I think could especially make you a quick fortune.
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1. Modern
They all talk about Modern (NASDAQ: MRNA). And for good reason. Biotechnology ranks as the leader in the race to develop a COVID-19 vaccine. Some might even see Moderna as he Leader in the race.
The New England Journal of Medicine Data from a phase 1 study of the modern COVID-19 vaccine candidate mRNA-1273 was released last week. The results generated a lot of emotion. All study participants who received mRNA-1273 had neutralizing antibodies (which can prevent infection with the new coronavirus). Even more encouraging, the levels of neutralizing antibodies in the study participants were higher than the levels found in patients who recovered from COVID-19.
Moderna plans to start a phase 3 study of the mRNA-1273 on July 27. If all goes well, the company could be on a fast track to obtaining FDA Emergency Use Authorization and full approval. Jefferies analyst Michael Yee believes Moderna’s COVID = 19 vaccine could generate more than $ 5 billion per year if it wins approval.
Depending on what happens to other developing COVID-19 vaccine candidates, I suspect Yee’s estimate might be too conservative. Furthermore, if mRNA-1273 proves to be safe and effective, it should greatly increase investor appreciation of the rest of Moderna’s portfolio. Although the biotech stock has skyrocketed so far this year, it should increase greatly if the company’s COVID-19 vaccine candidate reaches its potential.
2. Novavax
Novavax (NASDAQ: NVAX) it is not as advanced in clinical development with its candidate vaccine COVID-19 as is Moderna. It’s not too far, though: Biotechnology hopes to report the preliminary results from Phase 1 of its Phase 1/2 study of NVX-CoV2373 later this month. If all goes well, Novavax will advance the vaccine candidate to the Phase 2 trial.
A lot of money has already been bet on the success of Novavax. The Coalition for Epidemic Preparedness Innovations (CEPI) awarded up to $ 388 million for the development and production of NVX-CoV2373. The United States Department of Defense awarded Novavax a contract worth up to $ 60 million to make the vaccine for the military. Operation Warp Speed, the federal government’s program to accelerate the development of COVID-19 vaccines, announced $ 1.6 billion in funding for NVX-CoV2373.
While Novavax’s COVID-19 vaccine program has been in the spotlight, the company has another candidate for the portfolio who could also be a big winner in the near future. Novavax announced positive results for the NanoFlu flu vaccine candidate in March. Your next step is to request FDA approval. If approved, NanoFlu could become a box office hit.
3. Vaxart
Now for the most speculative of the group. Vaxart (NASDAQ: VXRT) Your COVID-19 vaccine candidate has not yet advanced to clinical trials. But its shares have soared nearly 4,000% so far this year. I think this may just be the start of a fantastic career for Vaxart.
Most developing COVID-19 vaccine candidates rely on injections. Otherwise, most vaccines of any type are injected. Vaxart, however, focuses on oral vaccines. These vaccines would not only be easier to swallow (pun intended) for many people who don’t like needles, but can also be stored at room temperature. Those are two great advantages.
Not surprisingly, Vaxart’s COVID-19 oral vaccine candidate has been selected to be part of a preclinical study in non-human primates that is funding Operation Warp Speed. Vaxart hopes to advance its candidate to a phase 1 clinical study later this year. If the company is successful with its oral COVID-19 vaccine, that should open up opportunities for its other oral vaccine candidates. Vaxart could be the biggest winner of the three in the long term.
The operative word
Moderna, Novavax and Vaxart could make you a quick fortune in the years to come. However, the key word in that statement is could.
All three biotech companies still face significant risks. That’s especially true for Vaxart, which lags well behind Moderna and Novavax in terms of pipeline progress. Potentially, you could incur big losses with these stocks as fast as you could make big profits (and maybe even more quickly).
Risk is the compensation you have to make to have a chance to make big profits. Only aggressive investors should consider buying Moderna, Novavax, or Vaxart. If you want to play safely (or at least safer), you should look at other actions.
