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Who’s Winning the Race for a COVID-19 Vaccine?

Written by Samuel Taube
Posted September 5, 2020

It’s hard to believe that a year ago, COVID-19 didn’t have a name. In fact, we weren’t even aware of its existence until December. 

Yet today, the nascent disease has killed more than 840,000 people worldwide, more than 180,000 of whom lived in this country. And a number of biotech companies — including two publicly traded firms — are racing to develop the vaccine that will put it behind us.

Which vaccine will make it to market first? Which works best? And how can investors help their development (and enrich themselves in the process)? 

To answer these questions, we’ve got to get to know the three leading vaccine candidates... 

Russia’s Untested Vaccine 

And before we get to the leading American and British vaccine candidates, we should probably discuss the Russian vaccine that has already been “approved” by the country’s government. 

Last month, Russia’s Ministry of Health issued a “registration certificate” for a vaccine called Sputnik V, developed by the Gamaleya Research Institute of Epidemiology and Microbiology in Moscow. 

The two-shot vaccine contains cold viruses that have been modified to carry the surface protein of the coronavirus. These modified viruses train the immune system to fight the coronavirus on its own. The vaccine supposedly confers two years of COVID-19 immunity to recipients. 

The certificate allows Sputnik V to be given to “a small number of citizens from vulnerable groups,” like frontline medical staff and elderly people. But it doesn’t allow the vaccine to be used widely until next year... because Russia hasn’t really tested it yet. At the time of writing, it had only been tested on 76 people. 

Hypothetically, that could be a non-issue. Gamelaya has successfully developed vaccines before without major safety hiccups. But the lack of testing is certainly risky, some would even say reckless. 

Back in 2007, the FDA halted trials of an experimental HIV vaccine that used the same technology — minor viruses modified to carry proteins from the target virus — after it found that the drug actually increased patients’ susceptibility to HIV. If Sputnik V backfires in a similar way, it could pour gasoline on the fire of the COVID-19 pandemic

With this in mind, biotech investors should ignore the news out of Russia until more substantive clinical trial data becomes available. Instead, focus on the western firms that are developing vaccines by the book. 

Moderna’s (NASDAQ: MRNA) Vaccine Candidate

And among American firms, no one is further along than Moderna (NASDAQ: MRNA)

The Massachusetts-based biotech company is developing a two-shot vaccine that uses messenger RNA (mRNA) to deliver viral genetic code to the patient’s immune cells, training them to recognize and fight the virus in the process. 

Moderna’s vaccine candidate was the first to enter human testing in the U.S., and it’s currently in a massive Phase 3 clinical trial with 30,000 participants. 

There is an element of risk to Moderna’s strategy; the mRNA technology its vaccine candidate uses is relatively new and has never successfully produced an approved vaccine before. 

But it’s in the last stage of testing and has appeared to be safe and effective so far. If Moderna wins first place in the vaccine race, its shareholders could benefit handsomely. The firm is currently worth less than $26 billion — a tiny market capitalization compared to the other two vaccine frontrunners... 

AstraZeneca’s (NYSE: AZN) Vaccine Candidate

On the other side of the pond, AstraZeneca (NYSE: AZN) is also well into Phase 3 clinical trials for its vaccine candidate. 

The AstraZeneca vaccine uses similar technology to the untested Russian vaccine; it uses a modified carrier virus to deliver coronavirus proteins to the immune system so that it can start learning how to destroy them. 

But unlike the Russians, AstraZeneca is putting its vaccine through its paces when it comes to testing. A 30,000-subject Phase 3 trial began in the U.S. last month, and so far, the vaccine has successfully produced immune responses with only minor side effects. 

How to Invest in a COVID-19 Vaccine

Moderna, AstraZeneca, and Gamelaya aren’t the only firms developing COVID-19 vaccine candidates. Pfizer, Johnson & Johnson, Novavax, and a handful of Chinese firms are also working on shots for the virus, but they’re moving slower than the two firms we’ve discussed in this article. 

So which one should you buy? The safest answer is... both

The nice thing about both Moderna and AstraZeneca is that they’re relatively diversified; both will still have rich pipelines if their COVID-19 vaccines don’t come to fruition. 

Moderna, as a small, mRNA-focused company, has more at stake in its vaccine trials than the massive biotech conglomerate that is AstraZeneca — but both could see substantial boosts in share price if their vaccine candidates are approved. 

Ultimately, however, biotech investing without a detailed understanding of the clinical trial process — and the data it produces — is akin to gambling. In order to spot the difference between winners and losers before the rest of the market, you need to be a doctor or scientist... or be in contact with a few of them. 

Topline Trader provides that biotech investing research bench, so you don’t have to hang out at a medical school to get accurate insights. Editor Jason Stutman employs a team of doctors and biotech researchers to screen drug candidates, and he has helped subscribers win substantial gains on early-stage drug companies. Click here to learn more.  

Until next time,

Monica Savaglia

Samuel Taube

Samuel Taube brings years of experience researching ETFs, cryptocurrencies, muni bonds, value stocks, and more to Wealth Daily. He has been writing for investment newsletters since 2013 and has penned articles accurately predicting financial market reactions to Brexit, the election of Donald Trump, and more. Samuel holds a degree in economics from the University of Maryland, and his investment approach focuses on finding undervalued assets at every point in the business cycle and then reaping big returns when they recover. To learn more about Samuel, click here.

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