There are no signs the coronavirus pandemic is slowing down in the U.S., with more than 1,100 Americans dying every day from COVID-19 in recent days. The daily number of new U.S. cases is consistently higher than 60,000. Beyond the staggering fatalities, one estimate by the Australian National University puts the virus' potential global economic damage at over $21 trillion. The need for a coronavirus vaccine has thus become paramount to saving lives and mitigating economic catastrophes.
More than 165 experimental vaccines are being developed against the coronavirus, with 27 candidates in human trials, according to The New York Times. Notable front-runners in the vaccine race include Pfizer (PFE -0.19%) and BioNTech's (BNTX -0.45%) BNT162b2 and Inovio Pharmaceuticals' (INO -2.02%) INO-4800. Investors in some of these companies have been well rewarded. Year to date, shares of BioNTech and Inovio have skyrocketed by 142% and 489%, respectively, while Pfizer shares saw no significant change. Which of these companies is the best investment today based on the strength of their potential coronavirus vaccine? Let's find out.
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What is INO-4800?
INO-4800 is a DNA-based vaccine that is responsible for producing a key protein -- the spike, or S-protein -- found in the coronavirus that facilitates the virus's entry into host cells. By injecting DNA that expresses the viral S-protein, INO-4800 seeks to induce an immune response to the viral protein, which will hopefully prevent infection if the vaccinated individual is exposed to the novel coronavirus.
In an interim phase 1 data release, 34 out of 36 (94%) of healthy volunteers who received two doses of INO-4800 developed overall immunological responses after six weeks. The vaccine was well tolerated, with no serious adverse events. While these results may seem promising, it's unclear how many patients who developed immunological responses had measurable levels of neutralizing antibodies (proteins that provide immunity against the coronavirus) or killer T-cells (immune cells that remember the pathogen).
Investors are hoping that INO-4800's final phase 1 data release contains information about either antibodies or T-cell response. However, the U.S. Department of Defense has backed the company's efforts to scale up its vaccine administering device called Cellectra with a $71 million manufacturing contract.
Inovio is planning to initiate a phase 2/3 clinical trial for its vaccine by the end of the summer. If these trials succeed, the company plans to manufacture up to 1 million doses by the end of the year.
Inovio recently ran into a dispute with its private manufacturing subcontractor VGXI, which alleged breach of contract, unfair competition, misappropriation of trade secrets, and unjust enrichment. Unfortunately, these allegations cast a shadow on both INO-4800's path to success and Inovio's investment credibility.
What about BNT162b2?
BNT162b2 is an experimental coronavirus vaccine under development by two large-cap biotech companies, Pfizer and BioNTech. Unlike Inovio's vaccine candidate, this candidate is an RNA vaccine that is responsible for producing the coronavirus' S-protein.
Also unlike INO-4800, the vaccine's phase 1 data discloses how many patients developed antibodies and killer T-cell responses. All participants who received the experimental vaccine developed neutralizing antibodies after dosage. In addition, participants who received the vaccine developed favorable degree of T-cell responses. There were no serious adverse events reported.
If the results sound very promising, they are. The experimental vaccine is included in the 90 million doses of vaccines secured by the U.K. government in the event of approval. The U.S. government recently signed a deal with Pfizer and BioNTech to order 100 million doses of the experimental vaccine. At a price of $19.50 per dose, that's potentially $1.95 billion in vaccine sales.
However, what makes the deal even better is that the U.S. government has the option to acquire 500 million additional doses. The two companies secured 120 million doses with the government of Japan as of July 31. The vaccine is now in phase 2/3 clinical trials.
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Which company has the better coronavirus stock?
Both Pfizer and BioNTech are better investment options compared to Inovio. Not only was BNT162b2 able to elicit both neutralizing antibody and T-cell response, but the two companies also have the manufacturing capacity to produce 100 million doses this year and 1.3 billion doses in 2021.
Pfizer is generating $11.8 billion in quarterly revenue, with its oncology portfolio growing by as much as 20% year over year. While BioNTech's pipeline candidates are not yet on the market, the company has over 452 million euros in cash and 217 million euros in upcoming equity investments to fund its vaccine until completion.
But if Inovio proves that 94% of patients who received its vaccine developed neutralizing antibodies, T-cell responses, or both, then the stock would be a strong buy as well. Right now, the company's wording is too vague. Unlike Pfizer and BioNTech, the company faces legal troubles that could impact its manufacturing capacity. Overall, investors should remain diligent and know that either vaccine could still fail at later stages despite all the positive developments.
