What happened

The major market indexes were slipping Thursday morning as COVID-19 cases continue to mount in the U.S. Several stocks of companies working on tests and vaccines for the novel coronavirus bucked the trend. As of 11:50 a.m. EDT, shares of Novavax (NASDAQ:NVAX) were up 7.4%. VBI Vaccines (NASDAQ:VBIV) and Dynavax Technologies (NASDAQ:DVAX) shares rose 6.3% and 5.1%, respectively. Co-Diagnostics (NASDAQ:CODX) stock lagged behind but was still up 2.7%.

So what

It's not surprising that coronavirus-focused stocks are moving higher than the market as a whole today. Investors are worried that the increased numbers of COVID-19 cases in many states could prolong the economic impact of the pandemic. But these fears make Novavax, VBI Vaccines, Dynavax, and Co-Diagnostics more attractive picks because of their COVID-19 programs.

Gloved hand blocking falling wood blocks spelling COVID-19 from knocking over other wood blocks

Image source: Getty Images.

It's still important to examine each company individually. Even though all of these stocks rose today, they aren't equally attractive.

All four companies are unprofitable, but three of them are generating revenue from products on the market. Dynavax and VBI market hepatitis B vaccines, although VBI's Sci-B-Vac is currently approved only in Israel. Co-Diagnostics sells COVID-19 diagnostics tests that have received emergency use authorization from the FDA.

Novavax might not be too far away from launching its first product, however. The company reported overwhelmingly positive results in March from a late-stage study of influenza vaccine NanoFlu and plans to seek FDA approval of the vaccine in the near future.

Co-Diagnostics is the farthest along on the COVID-19 front since it already is selling products. Novavax's COVID-19 vaccine candidate is in a phase 1/2 clinical study. Dynavax's adjuvant, CpG 1018, which is used in Heplisav-B, is used in four COVID-19 vaccine candidates; one of those vaccines is in a phase 1 clinical trial. VBI lags behind the others: Its experimental vaccine targeting multiple types of coronaviruses, including COVID-19, is in preclinical testing.

Now what

Investors will want to closely watch the quarterly updates for Dynavax, Co-Diagnostics, and VBI Vaccines to see if their revenue growth accelerates. Pipeline advances are also key -- especially for Novavax as it moves forward with plans to file for FDA approval of NanoFlu and tests its COVID-19 vaccine candidate.

Will the momentum continue for these coronavirus-focused healthcare stocks if the COVID-19 pandemic worsens? Maybe. Worries about the pandemic help these stocks, but only to a point. A lot depends on the individual progress for each company. 

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.