After all of these months of tracking coronavirus vaccine developers' progress, we're nearing the final stages of the race. As of today, nine programs are in phase 3 studies. And a vaccine may come even before the completion of that stage. U.S. Food and Drug Administration Commissioner Stephen Hahn recently said the agency would consider a possible emergency use authorization before phase 3 trials are over.
If you haven't bought coronavirus vaccine stocks yet, you may be thinking that you missed your opportunity. But that isn't the case. In fact, now is the perfect time to invest. The reasons? Compared to several weeks ago, share prices are more reasonable, and more information is available regarding each company's program. And for the eventual winners, the best is yet to come: They are likely to benefit from near-term and long-term share gains.
First to begin human trials
Moderna (MRNA 0.48%), Novavax (NVAX -1.96%), and Inovio Pharmaceuticals (INO 3.12%) have been among the most-watched in this vaccine race. Moderna, because it was the first to begin human trials. Inovio, because it followed a month later. Novavax stepped into the spotlight when Operation Warp Speed (OWS), a government effort to bring a vaccine to market by January, awarded it $1.6 billion.
Shares of the three clinical-stage biotech companies soared 385%, 4,385%, and 860%, respectively, from the start of the year through their peak, reached this summer. Each is now down 30%, 38%, and 52% from that point.
Investors piled into the shares as the companies announced the launch of clinical trials and reported early data. But as the programs progressed and rivals -- including big pharma companies like AstraZeneca (AZN 0.19%) -- closed in, the stocks lost some steam. From a price only perspective, investors looking to bet on a coronavirus vaccine player have an entry point today.
Along with a better price, investors now have more clues about which companies may become leaders in the coronavirus vaccine market. Though failure can happen at any stage in a clinical trial, advancing through early stage trials lifts some of the uncertainty.
For example, investors in Moderna today can better judge the potential vaccine's promise than they could a few months ago. Moderna reported positive interim data in May. But information about neutralizing antibodies -- those that block infection -- was only available for eight trial participants. By July, the company reported that all 45 trial participants showed neutralizing antibody activity. In participants given the dosage chosen for late-stage trials, levels were more than two times higher than those of recovered coronavirus patients. And last month, Moderna said the results in older adults -- enrolled later in the phase 1 trial -- were consistent with those in younger people.
Manufacturing and funding information
Access to manufacturing and funding information is another plus that we have now but didn't have when these companies' shares started to soar this spring. Novavax this month said a manufacturing agreement with Serum Institute of India will lift its capacity to more than 2 billion vaccine doses a year. And last month, Novavax said its funding for the investigational coronavirus vaccine program totaled $2 billion. Investments are from OWS, the Department of Defense, and the Coalition for Epidemic Preparedness Innovations.
These elements offer us more visibility than we had earlier in the coronavirus vaccine race. Now, before investing, we can better examine each company's trial data, funding, and manufacturing capacity. Are study results strong so far? Does the company have enough money and production abilities to make it a leader in the coronavirus vaccine market? Unfortunately, positive answers to those questions won't guarantee the company will win this vaccine race. But they do suggest it has a reasonable chance.
Taking the leap
Though now is a great time to buy coronavirus vaccine developers, that doesn't mean all investors should take the leap. Share performance of clinical stage biotech companies depends heavily on the outcome of their coronavirus programs. Success means big gains ahead, but failure may result in devastating losses. As always, only the most aggressive investors should consider taking a position.
That doesn't mean cautious investors should step aside. Instead, opt for larger players such as AstraZeneca or Pfizer (PFE -0.33%). These drugmakers have huge portfolios of marketed products. If their coronavirus programs fail, they still have plenty of other revenue drivers. That means their share performance is less sensitive to coronavirus news. And as with clinical stage companies, we know more about their programs now. For instance, Pfizer this month shared updates from the phase 1 trial of its vaccine candidate BNT162b2. The company said neutralizing antibody levels two weeks after the second dose remained higher than those of recovered coronavirus patients.
So, with more information on big pharmaceutical companies' investigational coronavirus vaccine programs, now is an ideal time to invest in them too.