It can take years for a stock to achieve multi-bagger status -- that is, to return several times its original value to its shareholders. But every so often it can take a mere 12 months -- or less. Take for instance Moderna (MRNA 1.58%), which has been one of the leaders in the race to develop a vaccine for COVID-19. In the past year, Moderna's shares are up by 839%, compared to gains of 16% for the S&P 500.

Ocugen (OCGN -1.69%), another biotech stock that could launch a coronavirus vaccine in the U.S. soon, has been on fire recently. Ocugen's stock is up by 404% in the past month and has delivered returns of 1,880% in the past year. Both companies feature on the list of the 100 most popular stocks on Robinhood, the trading platform that has gained popularity among novice investors, day traders, and millennials in recent years.

Moderna and Ocugen could see even better days ahead, but should you follow the lead of Robinhood investors and add these biotech stocks to your portfolio?

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1. Moderna 

On Dec. 18, Moderna's coronavirus vaccine, mRNA-1273, earned Emergency Use authorization (EUA) from the U.S. Food and Drug Administration (FDA). This regulatory nod was supported by an analysis of the company's phase 3 clinical trial for mRNA-1273, which proved more than 90% at preventing COVID infection. The vaccine has also received the green light from regulators in other countries, including the U.K. and Canada.

Moderna could generate billions from the sale of its coronavirus vaccine. According to Bernstein analyst Ronny Gal, the COVID-19 vaccine market will be worth a whopping $40 billion this year alone. And as one of the first to launch a much-needed coronavirus product, Moderna stands to win big. There are a few caveats to keep in mind, however. First, there is competition.

Moderna is currently sharing this market with the team of Pfizer and BioNTech, whose candidate was the first to earn EUA from the FDA. AstraZeneca's vaccine has been authorized in the EU. Pharma giant Johnson & Johnson could also earn EUA in the U.S. for its candidate soon. And Novavax has released positive data from its own two-dose vaccine trial.

Another new issue is that there are new strains of the SARS-CoV-2 virus that have emerged in the U.K. and South Africa. These new strains could pose a big problem to vaccine makers and challenge the efficacy of existing vaccines.

Doctor holding a piggy bank.

Image source: Getty Images.

But even these two caveats do little to reduce Moderna's prospects in this market. As the company said late last month: "The two-dose regimen of the Moderna COVID-19 Vaccine at the 100 [microgram] dose is expected to be protective against emerging strains detected to date." Moderna is also testing an additional booster dose of its vaccine and is advancing a variant booster vaccine candidate.

And with regard to competitors, the coronavirus vaccine market is more than large enough to accommodate multiple winners. Analysts see Moderna's revenue growing at 16.8% per year throughout the next five years. The company has other opportunities beyond mRNA-1273. It is developing more than a dozen vaccines against several infectious diseases and cancers.

For instance, the company is targeting the cytomegalovirus (CMV) with mRNA-1647. CMV is the leading infectious-disease cause of birth defects in the U.S. It affects approximately 25,000 newborns in America every year. There are currently no vaccines approved for CMV. 

Moderna released positive safety and immunogenicity (the ability to trigger an immune response in the body) interim data from a phase 2 clinical trial for mRNA-1647 in September 2020. The company intends to start a phase 3 study for it this year. Moderna is already set to see staggering gains in 2021, and if these other pipeline candidates pan out in the future, the sky is the limit for the once fledgling biotech.

2. Ocugen 

Ocugen recently announced a deal to develop and commercialize a coronavirus vaccine candidate called Covaxin with India-based Bharat Biotech. Under the terms of the agreement, Ocugen will be responsible for Covaxin's clinical development, regulatory approval, and commercialization in the U.S. The company will keep 45% of the profits the vaccine will generate in the country, and Bharat Biotech will pocket the rest.

Investors responded to this deal by sending Ocugen's shares through the roof. Note that Covaxin earned EUA in India in January. The vaccine looks likely to be effective against new strains of the virus, too, according to Ocugen. Further, it can be kept at temperatures between 2 degrees and 8 degrees

By contrast, both Pfizer's and Moderna's vaccines needs to be stored at much colder temperatures, which means Covaxin could present fewer logistical challenges. Bharat Biotech is currently running a phase 3 efficacy study for Covaxin in India. It started in November and initially aimed to recruit roughly 26,000 participants.

Nurse holding glass vial labeled "Covid-19 vaccine."

Image source: Getty Images.

Bharat Biotech chairman Krishna Ella said he expects the data from this study to be published in March. If it is positive, Ocugen's shares will probably soar yet again. The company has started to discuss the regulatory path forward for Covaxin with the FDA, although it isn't clear when it will submit the vaccine for regulatory review.

But whenever it does, it could serve as yet another catalyst for the stock. With that said, Ocugen currently has no other products that are undergoing even phase 1 clinical trials. The windfall it will get from Covaxin (if the vaccine makes it to market) will help the company fund its early-stage pipeline programs. 

Read the fine print

If everything goes according to plan for both Moderna and Ocugen, their stocks will continue to climb. But in my view, both biotechs carry above-average risk -- especially Ocugen. Moderna's vaccine has already been approved, and it is likely to reach blockbuster status this year. It also has several promising pipeline candidates, some of which are close to beginning pivotal phase 3 studies.

By contrast, we don't have efficacy data from Covaxin just yet, and if the results aren't good, Ocugen's stock will likely crash. With that in mind, Moderna looks like a much better option out of these two biotech stocks, and even then, only investors comfortable with lots of volatility should consider initiating a position.

This article represents the opinion of the writer(s), who may disagree with the "official" recommendation position of a Motley Fool premium advisory service. We're motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.