Many big drugmakers launched programs earlier this year to fight COVID-19. But the biggest winners for investors have been the stocks of small coronavirus-focused biotechs. Two that particularly stand out are Sorrento Therapeutics (SRNE.Q 33.33%) and Vaxart (VXRT -4.79%).
Sorrento's shares have soared more than 140% year to date. Vaxart stock has skyrocketed more than 43 times higher so far in 2020. Which of these coronavirus stocks is the better pick now? Here's how Sorrento and Vaxart stack up against each other.
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Coronavirus programs
Sorrento announced on Monday that the Food and Drug Administration (FDA) has cleared the way for it to begin a phase 2 study of abivertinib in treating patients with COVID-19 who have moderate to severe pulmonary symptoms. The drug hasn't been in Sorrento's pipeline for very long; the company announced that it was licensing the rights to abivertinib outside of China from ACEA Therapeutics in May.
In addition to abivertinib, Sorrento has three pipeline candidates targeting COVID-19 in preclinical testing. COVI-GUARD and COVI-SHIELD are experimental antibody therapies. COVIDTRAP is a protein that holds the potential to bind to the spike protein on the SARS-CoV-2 virus and prevent interaction by the virus with receptors on respiratory cells.
Vaxart only has one COVID-19 program in its pipeline, but it could be a promising one. The biotech evaluated multiple oral-vaccine candidates in preclinical testing and selected a lead candidate in May. Most vaccines are injected. Vaxart's vaccine candidate, though, is a tablet that's easier to manufacture and store than traditional vaccines.
In June, Operation Warp Speed, the U.S. government's program to accelerate the development of COVID-19 vaccines, selected Vaxart's vaccine candidate to be a part of a non-human primate (NHP) challenge study. Vaxart's candidate was the only oral vaccine to be included in the preclinical study. The biotech expects to begin a phase 1 study of its coronavirus vaccine candidate later this year.
Other pipeline candidates
Sorrento has two in phase 2 programs. Resiniferatoxin (RTX) is being evaluated as a potential treatment of terminal cancer pain and for potentially treating pain associated with moderate to severe osteoarthritis. In addition, Sorrento's pipeline includes three programs in phase 1 testing.
The company has an experimental CD38 chimeric antigen receptor T-cell therapy that targets multiple myeloma, a type of blood cancer. Its CD38 antibody-drug conjugate targets the treatment of amyloidosis, a rare disease where amyloid proteins build up in organs and tissues. Seprehvir is another early-stage immunotherapy that targets the treatment of solid tumors.
Vaxart's oral universal flu vaccine candidate successfully completed a phase 2 proof-of-concept study in immunizing against one flu strain. Vaxart is collaborating with Johnson & Johnson on preclinical testing of a quadrivalent version of the experimental vaccine that could potentially immunize against four flu strains. Results from the early-stage study of the experimental vaccine are expected soon.
The small biotech also has an oral norovirus vaccine candidate that demonstrated immune responses in a phase 1 clinical study.
Financial position
Sorrento reported nearly $21.9 million in cash and cash equivalents as of March 31, 2020. It also had restricted cash totaling a little over $45 million. Based on its spending in the first quarter, the company will soon need additional funds.
Vaxart's cash and cash equivalents stood at $29.9 million as of the end of March. The company's cash position should fund operations at previous spending levels well into the future. However, Vaxart is attempting to find partners to help advance its pipeline candidates.
Better coronavirus stock
Sorrento's pipeline is clearly farther along in development than Vaxart's pipeline. That gives Sorrento a distinct advantage.
However, my view is that it's too early to buy either of these biotech stocks. Both companies have a long way to go before they could potentially market any product.
Both stocks are simply too risky for most investors right now. But I think that Sorrento and Vaxart are worth watching. Success for their COVID-19 candidates or other pipeline programs could change the prospects for these small biotechs.
