While coronavirus cases in other developed countries are flattening, the United States has not been so fortunate. As of July 24, the number of coronavirus cases in the US has reached a new record, with more than 78,000 Americans infected. Meanwhile, approximately 1,485 Americans die each day from COVID-19.
However, there is light at the end of the tunnel. Currently, two of the largest biotech companies in the world, BioNTech (NASDAQ: BNTX)and GlaxoSmithKline (NYSE: GSK), are part of the race for a COVID-19 cure. Let’s take a look at which of the two companies is the best buy.
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Here is the progress of BioNTech
Together with Pfizer (NYSE: PFE)BioNTech is developing an experimental RNA vaccine for COVID-19 called BNT162b1. In their phase 1 clinical trials, 24 of 24 participants who received BNT162b1 developed antibodies that neutralize SARS-CoV-2. Additionally, 95% of patients who received the vaccine developed T-cell responses, meaning immune cells that potentially grant immunity to the deadly virus for several years. The vaccine was also well tolerated and no serious adverse events were reported.
The vaccine is currently in phase 2/3 of clinical trials. If successful, Pfizer and BioNTech would seek approval from the United States Food and Drug Administration (FDA) in October. But the demand for its prototype has already gone crazy. On July 22, the United States government secured 100 million doses of the BioNTech vaccine, with a potential total order of 500 million doses. At $ 19.50 per dose, that could translate to approximately $ 2 billion to $ 10 billion in revenue for the two companies over the next year. Investor expectations for BioNTech have been high, with a 147% return so far this year.
Vaccines aside, BioNTech also has a vibrant oncology portfolio, with 11 candidates developing in 12 clinical trials. The furthest of these is close to the development of phase 2. With € 452 million in cash (and an additional € 217 million in future investments), compared to a net loss of $ 53.4 million in the first quarter of 2020 I think investors are more likely to witness some front-line results before the company has to raise money again.
Image source: Getty Images.
Here is the progress of GlaxoSmithKline
Together with Sanofi (NASDAQ: SNY)GlaxoSmithKline is developing an adjuvant coronavirus vaccine. An adjuvant is a biological additive that can be combined with traditional vaccines to improve the ability of the latter to elicit the antibody and T-cell response. In addition, the adjuvant can reduce the amount of biological ingredients required by the vaccine, thereby reducing its manufacturing and distribution costs.
GlaxoSmithKline is currently capable of manufacturing up to a billion doses of its adjuvant by 2021, if the biological passes clinical trials. It is currently in the research phase of phase 1, with data expected in the coming months.
Although the company’s progress may not be as surprising as BioNTech’s, keep in mind that GlaxoSmithKline is a top-notch biotech company. Even if their vaccine programs fail, investors would still buy an underlying business that is increasing its revenue by 19% year-over-year starting in Q22020. The company generated $ 8.4 billion in revenue and $ 0.42 per share in earnings for investors during the quarter. One of the top performing segments was consumer healthcare, which grew 25% compared to the second quarter of 2019.
What is the best stock of coronavirus?
In general, I would say that BioNTech is, without a doubt, the best stock of coronavirus, since its experimental vaccine has already demonstrated preliminary efficacy and safety, it is on the way to being distributed by the end of the year if everything goes well and has the backing up orders. from the governments of the United States and the United Kingdom.
While GlaxoSmithKline is an accredited biotech company with a promising candidate, investors should look for the fine print before choosing it as coverage against the COVID-19 pandemic. Management has stated that it does not intend to benefit from its adjuvant vaccine, noting that if the treatment is approved, the company will reinvest its income from the vaccine in preparation for the pandemic. Investors weren’t thrilled by the announcement, and GlaxoSmithKline shares have fallen 14% so far this year. I think BioNTech is the best buy for biotech investors.
