There has been at least one group of stocks that has delivered tremendous returns so far in 2020. I'm referring to the stocks of companies that are developing drugs and vaccines targeting novel coronavirus disease COVID-19.

Two of the leaders in these efforts are Inovio Pharmaceuticals (INO -4.25%) and Regeneron Pharmaceuticals (REGN -0.60%). Shares of Inovio have skyrocketed close to 150% year to date, while Regeneron stock has jumped more than 30%. Which coronavirus-focused stock is the better pick for long-term investors? 

Gloved hand holding a vial of blood with coronavirus printed on a label with a red check mark in a box indicating a positive result

Image source: Getty Images.

The case for Inovio

Only two companies are already evaluating experimental COVID-19 vaccines in phase 1 clinical studies. Inovio is one of them. The biotech announced earlier this week that it has initiated a clinical trial in humans for its DNA vaccine INO-4800.   

Inovio expects to report preliminary immune responses and safety data from the early stage study. The company is also moving forward with additional preclinical testing of INO-4800. It's too soon to know if the experimental vaccine will be safe and effective in immunizing against the novel coronavirus. However, preclinical testing conducted thus far has demonstrated promising immune responses in animal models. 

While Inovio eagerly awaits results from the clinical study of INO-4800, the biotech has other key efforts under way. The most important of these is its clinical studies evaluating immunotherapy VGX-3100. Inovio reported positive results in the last week of March for two phase 2 clinical studies evaluating the drug in treating anal dysplasia and vulvar dysplasia associated with human papillomavirus (HPV). The company expects to announce results from a late-stage study of VGX-3100 in treating HPV-associated cervical dysplasia later this year.

AstraZeneca is evaluating MEDI0457, a combination of VGX-3100 and a DNA-based immune activator IL-12, in a phase 2 clinical study targeting the treatment of head and neck cancer caused by HPV. Inovio is also conducting its own mid-stage clinical studies of experimental drugs targeting recurrent respiratory papillomatosis (RRP), which is a rare disease where HPV causes tumors in the respiratory tract, brain cancer, and prostate cancer.

Inovio's pipeline also includes several experimental vaccines in addition to its COVID-19 program. The company has phase 2 studies in progress for vaccines targeting HIV and MERS. Other vaccine candidates target Ebola, Lassa fever, and Zika viruses.

The case for Regeneron

Regeneron's COVID-19 programs are taking two different approaches. The big biotech and its partner, Sanofi, are evaluating rheumatoid arthritis drug Kevzara in treating patients with lung inflammation caused by COVID-19. This testing should move along faster than vaccine clinical studies because Kevzara has already been evaluated for safety in other indications.

The other COVID-19 program that Regeneron is undertaking is even more intriguing. Regeneron announced in March that it has identified hundreds of viral-neutralizing antibodies that could potentially be used in two ways -- to protect against infection by the novel coronavirus and to treat patients with COVID-19. The company plans to select the two most promising antibodies and begin testing a cocktail therapy by early summer.

Unlike Inovio, Regeneron already has several approved drugs on the market. The company's biggest winner is eye-disease drug Eylea, which raked in $4.6 billion in the U.S. last year plus. Regeneron made another $1.1 billion from its portion of Bayer's sales of the drug outside the U.S. 

Regeneron made another $233 million in 2019 from its collaboration with Sanofi on atopic dermatitis drug Dupixent, cholesterol drug Praluent, and the aforementioned rheumatoid arthritis drug Kevzara. The biotech also as a fast-rising star in cancer immunotherapy Libtayo, which generated nearly $176 million in sales last year. 

More winners could be on the way. Regeneron's late-stage pipeline candidates include rare cholesterol disease drug evinacumab, chronic pain drug fasinumab, and Ebola antiviral drug REGN-EB3. 

Better stock to buy

Inovio has more upside potential. Success for its COVID-19 vaccine or VGX-3100 would no doubt send the biotech stock into orbit. However, Inovio also comes with a lot more risk. It's not profitable yet, and all of its fortunes hinge on positive clinical studies.

I think that Regeneron is the better stock to buy for most investors. Although the big biotech faces some risks of its own (notably including the potential for pipeline setbacks), it's already making significant profits and has amassed an ample cash stockpile.

But while my view is that Regeneron is the better choice over Inovio, I'm not recommending either stock as a buy. Why? I think that there are too many other stocks that offer even stronger risk-reward propositions than Inovio or Regeneron.