Modern (NASDAQ: MRNA) It has become a household name this year thanks to the rapid speed with which it has been developing and testing its candidate vaccine COVID-19, mRNA-1273. The stock has also been a big winner, rising over 300% so far in 2020.
But it is far from the only company trying to develop the coronavirus vaccine, and much less well-known biotechnology in hunting has seen its share price rise almost as much as Moderna’s. That biotechnology is VBI vaccines (NASDAQ: VBIV).
Which of these two coronavirus-focused biotech stocks is the best option for investors now? This is how they compare to each other.
The case of Moderna
It’s easy enough to build an argument to buy Moderna. Most importantly, the company is among the leaders in the race to develop a COVID-19 vaccine. Moderna began a phase 3 clinical trial of mRNA-1273 on Monday.
The outlook for mRNA-1273 looks quite good at the moment. The vaccine candidate generated high levels of neutralizing antibodies (the type of antibodies that prevent infection) and T-cell response (a good sign to provide long-term immunity) in phase 1 tests.
In April, the Advanced Biomedical Research and Development Authority (BARDA), a part of the United States Department of Health and Human Services, committed up to $ 483 million in funds to Moderna to help it accelerate mRNA-1273 through the process developmental. Earlier this week, BARDA added another $ 472 million to support the company’s 30,000 late-stage study of the vaccine candidate.
While mRNA-1273 is receiving most of the attention right now, Moderna’s portfolio includes other promising candidates. You are evaluating the experimental cytomegalovirus (CMV) vaccine mRNA-1647 in a phase 2 clinical study. You also have five other candidate vaccines in the initial tests.
However, biotechnology is not only focused on vaccines for infectious diseases. Is working with AstraZeneca in an experimental therapy directed at the treatment of heart failure, an immunotherapy directed at solid tumors and another candidate directed at coronary artery disease. Teamed up with Merck to develop a couple of cancer vaccine candidates. And its portfolio includes four other wholly owned programs in Phase 1 testing.
Liquidity should not be a problem for Moderna. The company reported $ 1.7 billion in cash, cash equivalents and book investments as of March 31. Since then, in addition to BARDA’s financing commitments, Moderna has raised around $ 1.34 billion through a secondary offering of shares.
The case of VBI vaccines
While Moderna focuses on a vaccine to immunize against SARS-CoV-2, VBI Vaccines is pursuing one that could protect people against the three main coronavirus threats, those that cause COVID-19, SARS, and MERS. Biotechnology is currently conducting animal preclinical testing of its pan-coronavirus vaccine candidate VBI-2901 with the goal of advancing to phase 1 clinical trials in humans sometime in the not-too-distant future.
Unlike Moderna, VBI is not strictly a clinical stage company. Its Sci-B-Vac hepatitis B vaccine is already approved in Israel. The company expects to file an approval request with regulators elsewhere, especially the United States, Canada and the European Union, starting in the fourth quarter.
While Sci-B-Vac is designed to prevent hepatitis B infections, VBI is also evaluating VBI-2601 in a phase 1b / 2a study as treatment for hepatitis B. The company hopes to report data from that study in the second half. of the year.
Like the Moderna pipeline, VBI also includes a candidate for the CMV vaccine, VBI-1501, which is currently in phase 1 trials. Additionally, biotechnology is evaluating VBI-1901 immunotherapy in a phase 1 / 2a study targeting glioblastoma multiforme, an aggressive form of brain cancer.
As of March 31, VBI’s cash position totaled $ 35.8 million. The company subsequently raised around $ 54 million in cash net from a public offering of shares. In May, it also established a debt financing service with K2 HealthVentures that allows it to access up to $ 50 million.
The best stock of coronavirus is …
In general, I would say that biotechnology with a product that has been approved in one country and is potentially in the process of being approved elsewhere would be a better investment than biotechnology with nothing on the market yet. However, the timing of the COVID-19 vaccine for Moderna is not ordinary.
I think the chances of mRNA-1273 getting FDA approval are pretty good. Moderna is preparing to manufacture 500 million doses a year; Assuming it can sell that amount, the company could be seeking annual $ 10 billion in revenue from the vaccine. And if mRNA-1273 is successful, it would bode well for the other candidates in the pipeline that the company developed using the same mRNA platform.
IBV vaccines certainly have potential with Sci-B-Vac and the rest of its portfolio, including its candidate for the pan-coronavirus vaccine, VBI-2901. And with a market capitalization of around $ 1 billion, it’s only a fraction of the size of Moderna, which is valued at more than $ 30 billion. But with mRNA-1273 starting late-stage clinical trials, I see Moderna as the best stock of COVID-19 right now.