Pharmaceutical stocks have been somewhat of a safe haven for investors as the coronavirus outbreak spread from China to the rest of the world. But as the pandemic deepened, now resulting in more than 782,000 cases worldwide, even these "safer" companies are beginning to feel the effects. The U.S. is now the coronavirus epicenter, with the most cases -- more than 161,000 as of today.

Initial concerns for drugmakers had to do with the supply of active pharmaceutical ingredients, which often come from China. The worry was that pharmaceutical companies wouldn't be able to produce enough of their drugs for patients. Now, as hospitals grapple with the influx of coronavirus patients and as the U.S. Food and Drug Administration works to manage the flow of new equipment to healthcare facilities, the focus has shifted to clinical trials.

A doctor examines a data sheet

Image source: Getty Images.

Pausing enrollment

Several pharmaceutical and biotech companies, including Bristol Myers Squibb (BMY -2.19%), Eli Lilly (LLY 1.85%), Vertex Pharmaceuticals (VRTX 0.68%), and clinical stage biotech Moderna (MRNA -1.69%) have announced delays in their clinical programs due to the crisis.

Bristol Myers Squibb said that for ongoing studies, no new sites will be initiated until at least April 13, and new studies won't be started until that date or later. The company is also delaying the launch of its newly approved multiple sclerosis drug, Zeposia. Eli Lilly will postpone the start of most new studies and pause enrollment in most ongoing trials. Vertex is also pausing enrollment in certain studies and may delay some new ones. The company is using virtual clinic visits and allowing home delivery of study drugs in certain programs. Moderna, which has made headlines recently for its work on a coronavirus vaccine, is pausing new enrollment in certain rare disease and infectious disease trials.

These decisions are unavoidable considering the current pressure on an already stressed healthcare system. Hospitals usually operate near or at full capacity, but the current crisis has pushed them beyond capacity and left many with a shortage of supplies and staff. It's getting more and more difficult for companies to maintain trial sites, which are often located at hospitals. Eli Lilly even decided to repurpose some of its laboratories for the diagnostic testing of patients who may have COVID-19, the illness caused by the novel coronavirus.

Slower time to market

So, does this delay in clinical trials mean trouble for pharmaceutical companies and their shares? Not necessarily. It means a slower time to market for the particular drugs involved. How slow? That will depend on the length of the crisis. Considering the crisis began in China in January and now that country is getting back to business, it would be logical to assume other countries may experience a similar timeline. With that assumption, drugmakers should be able to resume paused programs in Europe and the U.S. in a couple of months or earlier. For the development and regulatory submission of a particular drug, these postponements may add a few months to the final timeline.

Though eventually this delays potential revenue from the drug by a quarter, from a long-term perspective this isn't a deal-breaker for me when it comes to investing in pharmaceutical stocks. So far, drugmakers remain optimistic about their financials. Eli Lilly and Vertex haven't changed their outlooks, and Bristol Myers Squibb said it maintains its debt reduction goals and commitment to paying a dividend. All three companies say the coronavirus outbreak hasn't disrupted their delivery of medications to patients.

The safest in the crisis

Conducting clinical trials and research and development may continue to be a challenge in the current situation -- also due to the fact that people are encouraged to stay home to avoid coronavirus contamination. But the pharmaceutical industry still remains among the safest in the current crisis, especially for players with essential drugs on the market. While industries like retail suffer as people halt discretionary purchases, drugmakers can more easily maintain their revenue streams.

Any delays to programs and product launches, or even a limited number of product shortages, may not be the best news right now. But it won't weigh on the health of pharmaceutical shares in the long term.