As of July 6, the number of cases of COVID-19 in the U.S. has reached an all-time high of over 2,889,303, with over 129,953 deaths. While other developed nations have mostly flattened the curve, the U.S. has seen an exponential growth of new cases over the past few weeks.

Nationwide, politicians and governors are alarmed at the rate of new infections but are hesitant to reimpose lockdown and quarantine measures. As a result, investors have begun panic-buying biotech companies on the frontiers of creating new treatments and vaccines for COVID-19. Let's take a look at which of two such companies is a better choice. 

Masked woman with cell phone buying groceries

Image source: Getty Images.

An all-out war against COVID-19 

From antibodies to diagnostic tests to vaccines, Sorrento Therapeutics (NASDAQ:SRNE) tackles COVID-19 on all fronts with its pipeline candidates. In another article, I discussed how the company made some glaring statements regarding the effectiveness of its antibodies on Fox News. Here, we will focus on what Sorrento is doing in other significant areas to fight the pandemic. 

COVIDTRAP is Sorrento's proprietary therapeutic protein designed to bind to SARS-CoV-2 and prevent its entry into host cells. In preclinical studies, healthy cells were extracted from African green monkey kidneys, infected with SARS-CoV-2, and administered COVIDTRAP. And 100% of the samples had the virus neutralized following this procedure.

Although the results are promising, there are fundamental differences between the human biological system and that of a single type of monkey cells. As a result, I would be patient and wait for COVIDTRAP to demonstrate effectiveness in humans before making a move.

Next up is Sorrento's COVI-TRACK test, an in vitro antibody test for COVID-19 that the company claims can yield results in as little as eight minutes. The test is under review for Emergency Use Authorization from the U.S. Food and Drug Administration (FDA).

In a press release, Sorrento disclosed that the test was at least 97% effective at detecting negative cases and 94% effective at detecting positive cases. While these metrics may seem very good, it is vital to know that the current rate of infection for SARS-CoV-2 is still low in America. The Centers for Disease Control estimates that approximately 5% to 8% of Americans are infected with COVID-19. If we were to plug the numbers into a biostatistics calculator, then the COVI-TRACK test would yield a false negative 0.3% of the time, but produce false positives 33% of the time, putting its accuracy into question.

On top of all this, the company is also producing a COVID-19 vaccine labeled T-VIVA-19 that uses SARS-CoV-2 proteins to elicit the body to produce antibodies against the disease. The company has yet to enter preclinical studies with this new vaccine, which puts it a considerable distance behind a leading competitor.

In search of a coronavirus vaccine

While Sorrento seems to be fixated on an entire chain of therapeutic candidates and diagnostic test kits for COVID-19, Moderna (NASDAQ:MRNA) is focusing its efforts on developing a single vaccine to combat COVID-19. The vaccine, mRNA-1273, relies on injecting messenger ribonucleic acids (mRNA) encoding a key SARS-CoV-2 protein into the body to elicit an immune response.  

In an interim data release from phase 1, eight participants who received mRNA-1273 developed neutralizing antibodies (antibodies that give one immunity to a foreign pathogen) against SARS-CoV-2. It is unclear how many other patients were given the vaccine but did not develop neutralizing antibodies. The total estimated number of participants in the trial was 155.

Based on these preliminary results, the company expects to push mRNA-1273 into phase 3 clinical trials in July. The study will enroll up to 30,000 participants. So far, mRNA-1273 is one of only two vaccine candidates that's produced neutralizing antibodies when given to humans, the other being Pfizer's and BioNTech's BNT162. In June, Moderna signed an agreement with Catalent for large-scale manufacturing of mRNA-1273 in the third quarter of 2020, with the capacity to manufacture 100 million doses in just three months.

Which is the better coronavirus stock?

Currently, both companies have limited revenue and are trading at multi-billion-dollar valuations. In my opinion, I think their shares have already rallied beyond their potential.

If I were to make a pick, however, I would argue Moderna is the better buy, as it is currently one of the leading candidates in the race for a COVID-19 vaccine. There is a chance that the company's vaccine will be successful and reward shareholders. The bar is also low for its approval, as the FDA's new directive requires experimental COVID-19 vaccines to demonstrate 50% improvement against placebo for approval (not 50% neutralizing response). 

Although Sorrento has plenty of coverage in its pipeline, its approach may eventually result in a "jack of all trades, and master of none" scenario, as all of its COVID-19 therapy candidates are still in preclinical testing. Hence, biotech investors who have a philosophy of buying high and selling even higher should consider Moderna over Sorrento.