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Which COVID Stocks Are the Best Picks if Coronavirus Variants Spread?

By Keith Speights and Brian Orelli, PhD - Mar 18, 2021 at 6:10AM

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Some vaccine makers are better positioned than others.

Several COVID-19 vaccines are highly effective against preventing infection by the coronavirus strain that's swept across the U.S. It's a different story with newer coronavirus variants, though. But this could present opportunities for COVID-19 vaccine makers. In this Motley Fool Live video recorded on March 10, contributors Keith Speights and Brian Orelli discuss which COVID-19 stocks are the best picks if coronavirus variants spread.

Keith Speights: There was a laboratory study published in the New England Journal of Medicine just recently over the last few days. It found that the COVID-19 vaccine that was developed by Pfizer (PFE 0.56%) and BioNTech (BNTX 0.11%) neutralized the fast-spreading coronavirus variant that was discovered in Brazil.

Pfizer, along with Moderna (MRNA -0.92%) and Novavax (NVAX -0.88%), are either already testing or plan to soon test versions of their vaccines that target some of these new variants. Brian, which of these stocks do you think might be the best pick if these coronavirus variants become an even bigger issue in the future?

Brian Orelli: It's really hard to know how much to read into these laboratory tests, they sort of take antibodies out of people and see whether they can block the variants. That's works well except there's these two issues, right? There's the can the antibodies bind to the virus and block its infection in the cells. There is also just is the variant stronger than the original coronavirus and can that cause it to replicate faster and the antibodies not catch up. I don't think the laboratory tests are really measuring that aspect of it.

Who can make new vaccines quicker? Well, I think the leaders right now, mRNA-based vaccines at Pfizer and BioNTech and Moderna. I think those are going to be the easiest. They're going to be the quickest to develop the second boosters, too, that are specific to variants.

Novavax -- they're fairly quickly behind, they use a protein base. But I think that they can probably adapt it fairly quickly. I think part of the reason why Novavax is farther behind is just they got held up on manufacturing. I don't think it was an issue with manufacturing, but it was actually like capacity of manufacturing. They just couldn't find somebody to make enough drug for their clinical trials. I think that's the reason why we were a little bit further behind.

I think adenovirus-based vaccines are going to have a much harder time because I think the boosters are going to not work as well because that will develop antibodies to the adenovirus that delivers the DNA for the coronavirus. I think over time the adenovirus vaccine will be less and less useful.

Speights: Brian, this is going to be pure speculation here. But do you think that because of these variants and not just the ones that are on the scene right now, but others that could emerge in the future. Do you think that because of these variants, we're likely to be in a situation where we're needing booster shots on an annual basis for COVID-19?

Orelli: It seems like it's probably pretty likely, I guess it depends on how much antibodies we end up making and how quickly they wane. There's some data that suggest that T-cells might be important for long-term immunity against coronaviruses, and so we don't know what these vaccines will do for the long term. I think it's probably likely, although it's hard to tell.

Speights: Right, and my guess would be that even if that is the case, you wouldn't necessarily have to get two booster shots each year. For example, the Pfizer and Moderna vaccines right now require two shots. Do you think it's possible that on an annual basis, if that's what indeed happens, that we would just need one booster shot?

Orelli: Yeah, and I think you'll probably get it combined with the flu shots you already get. You'll get the same number of shots that you've been getting.

I think the other thing is, as we build up our antibodies, even the variants might not cause it as much of a sickness in people who don't get their booster. You'll get a lot of people who just like they don't get the flu shot, don't get booster shot, and then they end up getting the flu. Or they're going to get the coronavirus and they will be mild, cold-like symptoms versus in the hospital, can't breathe, symptoms.

Speights: Part of the uncertainty of why it's difficult to value some of these COVID-19 vaccines stocks is because we don't know for sure how much revenue they are going to be able to count on from their COVID vaccines after 2021. I think they're going to all have substantial revenue. The question is just how much?

Orelli: I think there's going to be a lot fewer people getting boosters. Just like there's a lot of people fewer people getting their annual flu vaccine.

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Stocks Mentioned

Pfizer Inc. Stock Quote
Pfizer Inc.
$53.71 (0.56%) $0.30
Novavax, Inc. Stock Quote
Novavax, Inc.
$46.13 (-0.88%) $0.41
Moderna, Inc. Stock Quote
Moderna, Inc.
$130.85 (-0.92%) $-1.21
BioNTech SE Stock Quote
BioNTech SE
$154.67 (0.11%) $0.17

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