Which company ranks as the leader in the development of a possible COVID-19 vaccine? Opinions will vary, but you can bet that AstraZeneca (NYSE: AZN) and Modern (NASDAQ: MRNA) They will be two of the most frequently mentioned drug manufacturers.
Both AstraZeneca and Moderna have made solid gains so far this year. Moderna stands as the biggest winner, with its share price more than quadrupling compared to AstraZeneca’s annual increase of 17%. But which of these coronavirus stocks is the best option now?
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The AstraZeneca case
What is the best argument for making AstraZeneca a better stock of coronavirus than Moderna? Probably, the candidate for the AstraZeneca COVID-19 vaccine is just one of the many potential growth engines for the large pharmaceutical stock.
In the first quarter of 2020, AstraZeneca claimed seven products with double-digit sales growth percentages. Four of those drugs generated year-over-year sales growth of more than 50%, with the cancer drugs Tagrisso and Imfinzi leading the way. And all seven did not include fast-growing new products such as the blood cancer drug Calquence.
AstraZeneca had sales of nearly $ 24.4 billion last year, with earnings of more than $ 1.3 billion. Wall Street analysts project that the large drug maker will increase its average annual earnings by 19% over the next five years, thanks to its current strong line and strong portfolio.
That portfolio includes more than 60 programs seeking additional indications for already approved medications. AstraZeneca claims it has 20 late-stage programs, in particular the new asthma candidate tezepelumab and the candidate for anemia roxadustat.
But we cannot overlook AstraZeneca’s COVID-19 candidate vaccine. The company cleverly partnered with Oxford University earlier this year. Partners are now evaluating the COVID-19 AZD1222 vaccine candidate in phase 2/3 clinical trials. World Health Organization Scientific Director Soumya Swaminathan publicly stated that she believes AZD1222 is probably the leading candidate among more than 20 COVID-19 vaccines in clinical trials.
There’s one other thing investors should like about AstraZeneca: The company’s dividends yield around 2.3%. If AstraZeneca’s earnings grow as strong as expected, dividends are likely to increase in the future.
The case of Moderna
Moderna cannot compete with AstraZeneca in financial performance or dividends. But biotechnology claims an advantage that could make it a more attractive choice for many investors: its relatively small size.
The fact is, success for Moderna’s COVID-19 vaccine candidate, mRNA-1273, would surely be a bigger catalyst for the stock than success for AZD1222 for AstraZeneca. And that’s because Moderna’s market capitalization is still around $ 30 billion despite its huge profits this year, while AstraZeneca’s market capitalization is almost five times higher.
Moderna’s chances of success for mRNA-1273 are looking better and better. The New England Journal of Medicine Last week it published positive results from a phase 1 study of the Moderna vaccine candidate COVID-19. Moderna expects to start a phase 3 study on July 27.
Jefferies analyst Michael Yee believes that mRNA-1273 could generate annual sales in excess of $ 5 billion if approved. That estimate does not seem unrealistic, considering the overall market opportunity for COVID-19 vaccines. But just looking at Moderna’s prospects for mRNA-1273 reduces the potential of biotechnology.
If mRNA-1273 is successful, it should make all of Moderna’s pipeline more attractive to investors. The company is currently evaluating a candidate messenger RNA (mRNA) vaccine for cytomegalovirus (CMV) in phase 2 trials. It has five other candidates for mRNA vaccines in early-stage studies.
In addition, Modern and Merck They are developing two mRNA cancer vaccines, one of which is in phase 2 and the other in phase 1. Moderna is also partnering with AstraZeneca on a couple of mRNA therapies found in phase 1 studies. and phase 2.
Best stock of coronavirus
Which of these actions is the best choice? It depends on your style.
If you are an aggressive growth investor, Moderna may be more attractive to you. Even with its notable surge in 2020, the success of mRNA-1273 would likely make the action move much higher.
On the other hand, more conservative investors should like AstraZeneca. The large pharmaceutical industry offers strong growth prospects along with a strong dividend. And AstraZeneca would do much better than Moderna if the respective COVID-19 vaccine candidates fail.
I like both coronavirus actions. But I think more investors will feel more comfortable with AstraZeneca.
