In the early days of the COVID-19 pandemic, coronavirus-themed stock investing was best left to investors with an appetite for higher risk. Vaccines were early stage and not only represented opportunity for big stock market rewards, but also for big share declines. But the situation has evolved. Low-risk investors can opt for coronavirus companies with late-stage programs and newly marketed products. And there still are plenty of earlier-stage companies to suit the needs of high-risk and growth investors as the economy starts to open back up.
Here, I'll talk about two stocks cautious investors may consider buying this month -- and two stocks aggressive investors may consider. There's something for everyone. Let's start with our lower-risk options.
Image source: Getty Images.
1. Moderna
I probably don't have to introduce Moderna (MRNA -0.58%). The company led the coronavirus vaccine race last year and launched its vaccine for adults age 18 and older in December. The shares gained more than 430% in 2020. But there are plenty of reasons for its share price to continue to grow.
In the near term, Moderna will be reporting revenue from product sales for the very first time. We can expect that in the first-quarter earnings report this spring. So far, for the full year 2021, Moderna has signed advanced purchase agreements totaling $11.7 billion in coronavirus vaccine sales.
In the future, those sales likely will move higher. Moderna plans to tap into a wider patient market. The company is testing its vaccine for teens aged 12 through 17 and hopes to commercialize in that indication by this year's back-to-school period. The company is also working on a possible booster to address newer strains of the coronavirus, including those emanating from the U.K. and South Africa.
2. Abbott
Abbott Laboratories (ABT 1.91%) has become a leader in coronavirus diagnostics. The U.S. Food and Drug Administration (FDA) has granted eight of the company's tests Emergency Use Authorization (EUA). In the fourth quarter ended Dec. 31, Abbott reported $2.4 billion in coronavirus diagnostics sales. And worldwide sales in the overall diagnostics business soared 111%.
But I think those gains are just the start. Here's why: The FDA authorized Abbott's rapid, $5, portable test -- the BinaxNOW -- in August. So, the fourth quarter was just the first full quarter of commercialization for that test. And the FDA only authorized an at-home version of the BinaxNOW in December. Abbott expects to deliver 30 million of those tests in the first quarter of this year.
Considering President Joe Biden's push for more testing, it's easy to imagine Abbott's COVID-19 diagnostics sales picking up even more steam in the months to come.
3. Redhill
Redhill Biopharma (RDHL 7.41%) is one of my favorite options for investors with a stomach for risk. That's because the company's coronavirus treatment candidate is still in phase 2 trials. And right now, the outcome of this candidate's clinical studies is the biggest catalyst for the stock.
So far, phase 2 data have been encouraging. Redhill reported that opaganib helped the breathing of hospitalized COVID-19 patients suffering from pneumonia. More than 52% of patients given the investigational treatment no longer needed oxygen support by day 14. That's compared to only 22% in the control group.
What's most interesting about opaganib is its mode of action in the human body. It targets part of a cell involved in viral replication instead of targeting the virus itself. That means it may be victorious against the virus even as it mutates. This is a significant plus considering recent concerns over new coronavirus strains.
So far, the FDA has only approved one treatment for coronavirus -- Veklury (also known as remdesivir) by Gilead Sciences (GILD 0.91%). The regulatory agency has granted EUAs to a handful of others, including antibody treatments by Regeneron Pharmaceuticals (REGN 0.32%) and Eli Lilly (LLY -2.63%). And companies haven't yet brought forth one major therapy that can cure a broad range of coronavirus patients. This means there is plenty of room for newcomers -- especially a newcomer with solid efficacy data from late-stage trials. Veklury generated more than $1 billion in sales for Gilead in the most recent quarter. Of course, therapies won't all be priced the same. But considering the need for treatment options, it's clear that an efficacious treatment could become a blockbuster.
What's next for Redhill? A readout from the phase 2/3 trial of opaganib in severe COVID pneumonia is expected in the first quarter of this year.
4. Gritstone
Gritstone Oncology (GRTS -0.95%) is another possibility for aggressive investors. The company recently signed an agreement to begin clinical studies of its coronavirus vaccine candidate with the National Institutes of Health's (NIH) National Institute of Allergy and Infectious Diseases.
With more advanced candidates out there, why should we look at one that's this far behind? Gritstone's potential product has the ability to handle various viral strains. The Gritstone candidate, like today's vaccines, targets the virus's spike protein. But it also targets other viral antigens. The aim is to produce neutralizing antibodies and invoke T-cell responses against the original virus and various strains. The antibodies and T-cells then work together to block and fight infection.
Preclinical results were positive. But until we know how the candidate performs in human trials, risk is high. So carefully consider your risk tolerance before buying shares of Gritstone.
