There are now 23 candidates for the coronavirus vaccine in clinical trials, according to the World Health Organization. Four of them use an approach that involves messenger RNA (mRNA) sequence engineering, which in turn targets ribosomes in human cells to produce a protein identical to that found on the surface of SARS-CoV-2, in other words, an antigen for the virus that causes COVID-19.
BioNTech (NASDAQ: BNTX) and Modern (NASDAQ: MRNA) developed two of those four candidates for the COVID-19 mRNA vaccine. Until now, Moderna’s efforts have received much more attention than the BioNTech program. But which of these coronavirus-focused stocks is the best option for investors now?
Image source: Getty Images.
The BioNTech case
Probably the most important reason why investors might prefer BioNTech over Moderna is the difference between their respective valuations. Moderna’s market capitalization is currently 50% higher than BioNTech’s. That should give BioNTech more room to function if its COVID-19 vaccine candidate succeeds.
Another reason BioNTech might deserve investors’ attention is that its chances of success are possibly better than Moderna’s. BioNTech actually has four experimental candidates for the COVID-19 vaccine in clinical trials versus one candidate for Moderna. Two of its candidates: BNT162b1 and BNT162b2 – recently won Fast Track designations from the Food and Drug Administration based on the strength of preliminary results of a phase 1/2 clinical trial, which showed high levels of neutralizing antibodies in patients who had received BNT162b1.
BioNTech also enjoys an advantage due to its association with Pfizer (NYSE: PFE), which the companies started in March. Pfizer brings financial resources and a global supply chain to the table that should assist BioNTech both during the development of its coronavirus vaccine candidates and (eventually, if the mark is met in clinical trials).
But investors shouldn’t overlook the rest of BioNTech’s portfolio. Its lead candidate, BNT122, is currently in Phase 2 testing in association with Roche as a first-line treatment for melanoma. BioNTech also has 10 other programs in early stage trials.
The case of Moderna
Why buy Moderna instead of BioNTech? Some investors would like you to be further ahead in the vaccine testing process. The company expects to begin a phase 3 study of its COVID-19 vaccine candidate, mRNA-1273, later this month, a few weeks later than originally planned. BioNTech, meanwhile, expects to start a phase 2b / 3 study of BNT162 perhaps in late July.
Some may also anticipate that the security profile for the Moderna candidate may be better than that of BioNTech candidates. There is still no way of knowing how the two biotech COVID-19 vaccine candidates will face each other. However, Moderna is moving towards late-stage testing with a 100 microgram dose, while the 100 microgram dose of BioNTech produced adverse effects, usually pain at the injection site, more frequently than lower doses in phase 1/2 test subjects.
There is also a downside to BioNTech’s partnership with Pfizer that could work to the benefit of Moderna’s shareholders. Financial details of the collaboration between BioNTech and Pfizer have not been released. However, you can bet that Moderna would get a much larger portion of the proceeds from sales of its COVID-19 vaccine if approved than BioNTech.
Finally, the Moderna pipeline is arguably stronger overall: It has three programs in phase 2 testing (excluding mRNA-1273) compared to BioNTech, which has only one. Two of those programs were promising enough to attract the interest of the big drug makers. AstraZeneca and Merck.
In addition, Moderna has 11 mRNA programs in the initial tests. That’s one more than BioNTech (not counting its COVID-19 vaccine candidates).
The best investment in the coronavirus vaccine now is …
At this point, the pros and cons of these two stocks make the arguments for investing in either one roughly the same, in my opinion. Other clinical trial results may well tilt the pendulum toward one. But, for now, I think BioNTech and Moderna have the potential to be even bigger winners than they already have been.
However, keep in mind that there is still a chance that both stocks could be big losers in the coming months. There are many reasons to be cautiously optimistic about the prospects for your COVID-19 vaccine candidates. However, the risk levels for both stocks of biotechnology will remain high at least until the results of phase 3 of the trial are available.
