Shares of the clinical-stage vaccine companies Inovio Pharmaceuticals (INO -5.75%) and Novavax (NVAX -2.97%) both jumped by as much as 18% in pre-market trading Monday morning. Inovio and Novavax appear to be getting a major boost this morning from the latest COVID-19 statistics, which seem to indicate that the outbreak is quickly turning into a global pandemic.
The biggest takeaway is that Iran, Italy, and South Korea all saw a sharp rise in the number of COVID-19 cases over the weekend. Afghanistan, Egypt, and Lebanon also reported their first COVID-19 infections recently, indicating that the virus is starting to spread across the globe.
Investors are clearly banking on Inovio or Novavax being among the first companies to develop an effective vaccine against this deadly respiratory virus. Inovio, for its part, previously announced that it has an experimental vaccine already designed and ready for human trials. Novavax hasn't said much about its COVID-19 prospect, but it also stated near the beginning of the outbreak that it had a promising vaccine in the works as well. Both companies noted that they could kick off clinical trials for their respective COVID-19 vaccine candidates within just a matter of months.
Is this viral outbreak a compelling buying opportunity? In short, there's no logical reason to buy either of these developmental biotech stocks on this news. Any experimental vaccine will likely take years to trial and subsequently gain marketing approval. By then, the COVID-19 threat will most likely have petered out.