As the market swoons over the latest coronavirus vaccine updates from Pfizer and Moderna, it's easy to lose sight of the fact that there are still other candidates in the works. In fact, several of the vaccine contenders may well experience significant growth over the next year, provided that they can actually get their vaccines out the door.
GlaxoSmithKline (GSK 1.19%), Novavax (NVAX 6.03%), and Johnson & Johnson (JNJ +0.05%) aren't about to start selling their vaccines tomorrow, but they'll probably report on their clinical trial data before the end of the year. And, assuming that they get regulatory approval in the first half of next year, they'll start to realize the upside right away. Let's take a look at these three companies to understand how and when their coronavirus programs are likely to deliver returns for shareholders.
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GlaxoSmithKline
In its coronavirus vaccine effort, GlaxoSmithKline is collaborating with Sanofi (SNY 1.87%), one of its major competitors. If this collaboration proves successful, it'll add yet another in-demand product to the lineup of the world's largest vaccine maker. More importantly, success with a coronavirus vaccine would validate GSK's proprietary adjuvant (immune system booster), which is its most significant contribution to the joint effort. If the adjuvant helps its candidate to perform better than the competition, it could win lucrative technology licensing agreements in addition to seeing direct revenue from the sale of vaccine doses.
If its past actions are any indication, GSK will likely reward its investors in the form of increasing dividend payments. But investors should consider that these payments will only increase if the company thinks that doing so is sustainable. So, consider adding GSK to your portfolio if you have a preference for dividend income, and don't be too surprised if it takes a couple of quarters after the vaccine's approval to reflect its increased earnings in the form of a higher payout.
Novavax
Novavax's stock has already grown more than 3,000% this year, shattering the wildest dreams of its early investors in the process. And, if its vaccine is approved, it'll easily grow much more next year. There's more to Novavax's future than its coronavirus vaccine, though, and that's exactly where its growth potential lies.
Novavax's NanoFlu inoculation is intended to treat influenza in older adults, and it's almost ready to hit the market. After meeting all of its clinical trial objectives early this year, the next hurdle is to prove that the company's manufacturing capabilities are sufficient to provide a consistently high-quality product. Novavax hasn't specified when this process will be complete.
But by the end of next year, Novavax could be expanding its revenue for the first time via sales. The revenue growth will likely propel Novavax to its first few quarters of profitability -- and fund the final stretch of its coronavirus candidate in the process. If the market's enthusiastic reaction to the company this year is any indication, 2021 will be another great time to be a Novavax investor.
Johnson & Johnson
By selling hundreds of millions of doses, Johnson & Johnson will take advantage of its worldwide distribution operations, not to mention its expertise with low-cost pharmaceutical production. With its candidate priced at just $10 per dose, J&J has already inked deals with governments for individual purchases worth upward of $1 billion, and more are likely to follow. Likewise, the company is already making plans to manufacture its candidate at a mass scale, signing a multi-year agreement worth an estimated $480 million with Emergent BioSolutions in July. To say that the company is investing heavily in its vaccine would be an understatement.
It could report results on its vaccine candidate by the end of this year and subsequently earn approval before the first quarter of 2021. J&J could start to distribute doses immediately thereafter. So, investors might see returns as early as the first or second quarter. Like GSK, J&J prefers to issue dividend payments to reward investors. But, if its revenue increases significantly, it's reasonable to expect some equity appreciation as well.
