All eyes are on the drug manufacturers that are racing to develop the first safe and efficacious coronavirus vaccine. Global COVID-19 cases have crossed the 15 million mark, with at least 634,000 deaths worldwide. In the United States alone, 4.1 million cases have been reported with at least 144,000 deaths, as of July 24. With cases rising every day, the country is limited in its ability to fully stop the spread of the virus until there's a vaccine on the market. 

Currently, 198 coronavirus vaccines are in development with 19 in clinical testing. Among them, Moderna (NASDAQ:MRNA) has commanded much of the attention. Vaccine development typically takes many years, but due to the urgency and the rising cases, the process has been expedited. In April, the Biomedical Advanced Research and Development Authority awarded Moderna with $483 million in funding to accelerate the development of its vaccine. Moderna stepped into the spotlight on July 14 when it announced positive news with its interim results from its phase 1 trial for its COVID-19 vaccine candidate.

Vials labeled COVID-19 vaccine

Image source: Getty Images.

The vaccine race is on

The results of the analysis of Moderna's open-label phase 1 study of its mRNA-1273 vaccine candidate were published in The New England Journal of Medicine. Moderna's potential coronavirus RNA-based vaccine aims to provide immunity through the introduction of genetic material or RNA. Biotech and pharma companies are developing COVID-19 vaccine candidates across nine different categories and an RNA-based vaccine is just one. This interim analysis "evaluated a two-dose vaccination schedule of mRNA-1273 given 28 days apart across three dose levels (25, 100, 250 µg) in 45 healthy adult participants ages 18-55 years, and reports results through Day 57." 

The results showed that the vaccine was safe and successfully neutralized antibodies in all participants, meaning it prevented infection from novel coronavirus. Moderna's phase 2 trial, the study of which started on May 29, is in the process that will evaluate the vaccine further. Through phase 2, Moderna wants to "assess the safety, reactogenicity, and immunogenicity of two mRNA-1273 vaccinations administered 28 days apart."

Moderna will start its phase 3 'Cove' study involving 30,000 participants on July 27 with a partnership with technology firm Medidata. The main goal of the phase 3 trial is to check if the "primary endpoints of prevention of symptomatic Covid-19 disease are achieved in the vaccine-treated group."  

The company has completed manufacturing the vaccines required for phase 3. It is already gearing up to deliver 500 million and 1 billion doses annually, even before phase 3 has begun, which is a bold move considering that many things can still go wrong.

This biotech company's shares could skyrocket if it wins the vaccine race. But keep in mind, besides the COVID-19 vaccine which is in trial phases, Moderna doesn't have any other approved products in the market. Currently, it has many vaccines in its pipeline for development that are either in phase 1 or pre-clinical stage.

Other pharma companies are also sprinting to develop the first safe and efficacious coronavirus vaccine, including AstraZeneca (NYSE:AZN), which is in the process of conducting a phase 2/3 trial now, along with a partnership with the University of Oxford. 

Meanwhile, Pfizer (NYSE:PFE) and BioNTech (NASDAQ:BNTX) have received a "fast track" designation from the U.S. Food and Drug Administration for two vaccine candidates in ongoing phase 1/2 clinical studies in the U.S. and Germany. Johnson and Johnson (NYSE:JNJ) is also working on a potential vaccine for COVID-19 and expects to begin the phase 1/2a clinical trial by the second half of July.

The New York Times reported while Johnson and Johnson and AstraZeneca assured lawmakers that they would manufacture millions of doses of the vaccine without any profit, Moderna made no such promise. 

What investors can expect

Moderna's shares have soared by 256% year to date, with the S&P 500 falling by nearly 1%. Hopes rose after its positive results from the phase 1 trial, pulling the stock up 32% in the week ended July 17. For the same period, shares of AstraZeneca, Pfizer, and BioNTech have gained 14.7%, 9.6%, and 2.9%, respectively.

Biotech stocks performance for the week ended July 17

Image Source: Y Charts.

There are also a lot of risks involved, including further trials, regulatory approvals, and a competitor beating Moderna to market with an approved vaccine. With the world desperately waiting for a vaccine, any company succeeding in their coronavirus vaccine endeavor would be the best news of the year, but not for Moderna's shares if they fail to win the race.

A basket of carefully selected biotech stocks involved in coronavirus vaccine development could pay off significantly for aggressive investors who are willing to handle the risk of any unfavorable news. That said, Moderna's promising phase 1 results make it a good coronavirus stock to buy before the release of its phase 3 trial results.