The effort to develop a coronavirus vaccine has been impressive. Over 190 coronavirus vaccine candidates are in some stage of testing, according to the World Health Organization. Of those, 42 are being evaluated in clinical studies, and 10 have reached late-stage clinical trials.

While these numbers are remarkable, most of these experimental vaccines aren't close to being ready for Americans to receive. There are only two coronavirus vaccines that could possibly meet the U.S. Food and Drug Administration Emergency Use Authorization guidelines by the end of 2020. 

Gloved hands holding two bottles labeled COVID-19.

Image source: Getty Images.

Tight guidelines

Normally, vaccines must undergo a lengthy review process to secure FDA approval. However, the FDA can allow unapproved vaccines to be used in an emergency, such as in the event of an emerging infectious disease. The COVID-19 pandemic qualifies as a biological threat for which the FDA can grant emergency use authorization. 

While the EUA process isn't as stringent as a full FDA approval, the agency still wants to ensure that vaccines used to treat Americans meet safety and efficacy thresholds. Earlier this month, the FDA released rules for the biopharmaceutical industry to follow when seeking EUA for coronavirus vaccines.

The FDA stated that it "does not expect to be able to make a favorable benefit-risk determination that would support an EUA" without phase 3 data that included, among other factors, "a high proportion of enrolled subjects (numbering well over 3,000 vaccine recipients) followed for serious adverse events and adverse events of special interest for at least one month after completion of the full vaccination regimen." In addition, the FDA's guidance said that late-stage clinical data for coronavirus vaccine candidates "should include a median follow-up duration of at least two months after completion of the full vaccination regimen."

An advisory committee consisting of infectious disease experts from outside the FDA will initially review any EUA filings for coronavirus vaccines. This committee will recommend whether or not the agency should grant EUA based on the safety and efficacy data in the regulatory submissions. The FDA doesn't have to go along with the advisory committee recommendations, although it seems likely that it will because of concerns that the EUA process could be politicized. 

Only two contenders

A drugmaker would need to file for EUA of a coronavirus vaccine candidate by late November to have a realistic chance of winning FDA authorization by the end of this year. At this point, there are only two vaccine candidates that could meet this deadline: Pfizer's (NYSE:PFE) and BioNTech's (NASDAQ:BNTX) jointly produced BNT162b2 and Moderna's (NASDAQ:MRNA) mRNA-1273.

Pfizer and BioNTech have repeatedly stated that they expect to report preliminary results from a phase 3 study of BNT162b2 this month. Moderna CEO Stephane Bancel said in September that his company would have enough data to submit for EUA of mRNA-1273 on Nov. 25, 2020.

What about the other eight COVID-19 vaccines in late-stage studies? Five are experimental vaccines developed by Chinese and Russian drugmakers that aren't being tested in the U.S. Novavax has initiated a phase 3 study in the U.K. of its coronavirus vaccine candidate, but hasn't begun a late-stage U.S. clinical trial yet.

That leaves only AstraZeneca's (NASDAQ:AZN) AZD1222 and Johnson & Johnson's (NYSE:JNJ) JNJ-78436735. However, both U.S. late-stage studies for these vaccine candidates are paused while potential safety issues are investigated.

In September, AstraZeneca CEO Pascal Soriot said that he thought his company could still have data before the end of the year to submit for regulatory review, but he probably expected the U.S. study would have resumed by now. The quoted timeline still wouldn't have enabled AstraZeneca to actually secure FDA EUA before year-end. 

J&J started its phase 3 study on Sept. 23, 2020 -- later than the other late-stage candidates. It's doubtful that the company would have been able to meet the FDA's guidance for EUA submission even if its late-stage study had proceeded.

Automatic winners?

Should investors assume that Pfizer, BioNTech, and Moderna will automatically be the biggest winners in the coronavirus vaccine market? No. First, the companies' COVID-19 vaccine candidates must first demonstrate that they're safe and effective in their respective late-stage studies. They'll then need to win FDA EUA. BNT162b2, mRNA-1273, or both could stumble along the way.

More importantly, there are likely to be waves of coronavirus vaccines. The first vaccines on the market won't necessarily be the best. Others could follow that offer better safety or efficacy profiles, or more convenient administration, distribution, and storage. 

Also, keep in mind that small biotech stocks could be bigger winners in terms of share performance than big pharma stocks. This could happen even if the small biotechs' coronavirus vaccines don't capture as much market share as big drugmakers' vaccines do. 

For now, though, Pfizer, BioNTech, and Moderna are clearly the leaders in the coronavirus vaccine race. If their vaccine candidates secure FDA EUA before the end of 2020, all three stocks should enjoy solid gains.