Our indicative theme of Coronavirus Vaccine stocks – which includes a diverse set of U.S. based pharma and biotech companies that are working on novel Coronavirus vaccines – is up by over 600% year-to-date, on an equally weighted basis, compared to the S&P 500 which has gained just about 3% over the same period. However, these stocks have seen a sell-off of sorts over the last several weeks, due to mounting competition and weaker than expected pricing, based on vaccine supply deals with governments. Novavax (NASDAQ: NVAX) has been the biggest driver of the theme’s returns, rising by over 2,300% year-to-date. On the other side, Pfizer stock is down about -6% this year. Below is a bit more on the companies in our theme of Coronavirus Vaccine stocks and relative performance.
Novavax, a late-stage biotechnology company engaged in vaccine development has seen its stock surge by over 2,300% year to date, driven by its work on Covid-19 vaccines. The stock has returned about 160% since the end of 2018. The company received about $1.6 billion from the U.S. government to advance the manufacturing of its vaccine candidate, which is currently in phase 2 trials.
Moderna, a clinical-stage biotech that is carrying out phase 3 trials of a Covid-19 vaccine, has seen its stock rally 200% this year, but remains down by about -35% from its July highs. The stock has returned about 290% since 2018. (Related: How much could a Covid-19 vaccine add to Moderna’s EPS?)
Johnson & Johnson, the diversified pharma behemoth, is also working on a Covid-19 candidate, although it remains slightly behind rivals in the clinical timeline, as phase 1 trials started in July. The company signed a $1 billion deal to supply 100 million doses to the U.S. government last month. The stock is up by about 3% year-to-date and is up by about 19% since 2018. (Related: Is Johnson & Johnson a better bet than Merck?)
Pfizer: the pharma major, which is working with German partner BioNTech on a Covid-19 vaccine, is down by -6% year-to-date. The stock is also down by about -13% since 2018. Phase 3 testing for the vaccine began in the U.S. in July. (related: Pfizer looks less expensive compared to Roche)
While vaccine stocks could offer further upside, there is a considerable risk as well. What if instead, you are looking for a more balanced portfolio? Here’s a top-quality portfolio to outperform the market, with over 100% return since 2016, versus 55% for the S&P 500. Comprised of companies with strong revenue growth, healthy profits, lots of cash, and low risk. It has outperformed the broader market year after year, consistently.
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