Robinhood's commission-free trades have attracted many investors. Millions of them are millennials jumping into investing for the first time.
With the COVID-19 pandemic raging on, you might expect that investors on Robinhood have looked at ways to profit from the coronavirus outbreak. And you'd be right.
At least nine stocks of companies with coronavirus programs rank in the top 100 most popular stocks on Robinhood's trading platform. Here are the three most popular coronavirus stocks -- and whether or not they're smart picks to buy right now.
In January, Moderna announced that it was moving forward quickly to develop a messenger RNA vaccine candidate to prevent infection by the novel coronavirus. By the middle of March, the National Institutes of Health was evaluating Moderna's COVID-19 vaccine candidate, mRNA-1273, in a phase 1 clinical study.
Today, Moderna is one of the leaders in the race to develop a coronavirus vaccine. It kicked off a late-stage study on July 27 that should enroll around 30,000 participants. Moderna hopes to be in a position to seek FDA approval or Emergency Use Authorization by the end of this year.
Inovio Pharmaceuticals (NASDAQ:INO) takes the prize as the No. 2 most popular coronavirus stock for Robinhood investors. The biotech was better known for its late-stage cervical dysplasia candidate VGX-3100 coming into 2020. But, like Moderna, Inovio moved rapidly earlier this year to launch a COVID-19 vaccine program.
No other drugmaker claimed a vaccine candidate in phase 2 testing targeting any member of the coronavirus family other than Inovio until recently. Inovio's research on INO-4700, a vaccine candidate for immunization against the coronavirus that causes Middle East respiratory syndrome (MERS), gave the company a great launching pad for its work on a vaccine candidate targeting novel coronavirus SARS-CoV-2.
Inovio reported encouraging interim results from a phase 1 clinical study of its COVID-19 vaccine candidate, INO-4800, on June 30. The small biotech hopes to advance INO-4800 to a phase 2/3 study later this summer.
Pfizer (NYSE:PFE) is the highest-ranked big pharma with a COVID-19 vaccine candidate in development on the list of Robinhood's 100 most popular stocks. But the big drugmaker comes in several spots behind Inovio to take third place for coronavirus stocks on the trading platform.
In March, Pfizer announced that it was teaming up with German biotech BioNTech (NASDAQ:BNTX) to develop a COVID-19 vaccine candidate. The two companies had previously partnered to develop a messenger RNA influenza vaccine candidate.
Pfizer and BioNTech announced positive results from phase 1/2 studies of the BNT162 program in the U.S. and Germany in July. The companies selected a candidate, BNT162b2, to advance into pivotal phase 2/3 testing. They also won a major agreement with the U.S. government to supply 100 million doses of the vaccine for $1.95 billion plus a deal with Japan to supply 100 million doses for an undisclosed amount.
Are they buys?
Inovio is arguably the riskiest choice among these popular Robinhood coronavirus stocks. The biotech hasn't provided all of the details yet from its phase 1 study of INO-4800. My view is that Inovio is definitely a stock to keep on your radar but not one to buy just yet.
Moderna is also risky, especially considering great growth expectations are already baked into its share price. However, I think that the chances of winning approval are pretty good now that mRNA-1273 is on phase 3 testing. Moderna could realistically achieve $15 billion or more in annual sales if the vaccine candidate is successful.
The rest of its pipeline of experimental mRNA therapies and vaccines would also likely be seen as more valuable if mRNA-1273 wins approval. I think that Moderna is a buy -- but only for aggressive investors willing to take on considerable risk.
What about Pfizer? It's the least risky of the three most popular coronavirus stocks on Robinhood. Pfizer has plenty of growth drivers even if BNT162b2 flops, including blood thinner Eliquis and rare-disease drug Vyndaquel. However, I expect that BNT162b2 will be successful in late-stage testing and will be yet another blockbuster for the big drugmaker.
Don't worry that Pfizer's growth has been anemic in recent years. The company's Upjohn unit has held it back. But with a merger of Upjohn with Mylan on the way later this year, that shouldn't be a problem for much longer. My take is that conservative investors should consider buying Pfizer.