Coronavirus vaccine stocks likely have turned many investors into millionaires over the past year. Players like Novavax and Vaxart climbed 2,700% and 1,500%, respectively, as two of last year's biggest gainers. Investors who were early believers in those companies saw their investments soar. The movement isn't over. Vaccine stocks still have room to grow. Experts say the coronavirus is here to stay -- and that means strong revenue prospects ahead.
So, let's look at another vaccine stock. This particular one has given investors high hopes -- until a recent trial data report. I'm talking about CureVac (CVAC). The biotech company is studying its mRNA vaccine in a pivotal phase 2b/3 trial. Do shares of CureVac have the potential to make you a millionaire? Or has the recent news closed the door on that possibility?
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CureVac versus Pfizer and Moderna
CureVac said last week that its vaccine candidate was 47% efficacious in the prevention of COVID-19. That's including mild, moderate, and severe cases. The company examined 134 cases of coronavirus in a trial involving 40,000 participants. That level of efficacy is far below the 90% and better of market leaders Pfizer and Moderna. Even worse, the company said it couldn't draw an efficacy conclusion regarding trial participants over age 60. This is a big problem -- older people have been among the most vulnerable to the coronavirus.
CureVac said variants are what hurt its performance. The company identified about 13 different strains among the coronavirus cases examined.
Now, the company is waiting for the accrual of 80 more cases before analyzing all trial data. At that point, it will decide on a regulatory path.
This picture sounds pretty grim. But there is a bright spot farther down the road. CureVac also is working on a next-generation coronavirus vaccine candidate. And it recently reported positive preclinical data. Serum from vaccinated rats showed neutralization of variants including the ones originating in the U.K. and South Africa.
CureVac said this next-generation candidate is different from the candidate in late-stage testing. The new candidate includes optimizations that improve the stability and work of mRNA within the cells. The result is stronger and lasting protein expression. And all of this at low doses. CureVac plans to launch a clinical trial of this candidate in the third quarter.
Pipeline programs
CureVac has about a dozen pipeline programs. They primarily include infectious diseases and oncology. Excluding the coronavirus vaccine candidate, all others are in phase 1 studies or an earlier stage of development.
Now, let's have a look at CureVac's share price. The stock sank 39% in one trading session following the vaccine efficacy report last week. That leaves CureVac down 26% year to date.
I'm not optimistic about CureVac's late-stage coronavirus vaccine candidate. Especially considering efficacy of all commercialized rivals -- and even some that aren't yet commercialized, like Novavax -- is superior.
The next-generation candidate looks promising, however. And there is opportunity for latecomers to the market if their potential vaccines stand out or at least meet the performance of current leaders. CureVac already has a big advance purchase agreement with the European Union. It's for a minimum of 225 million doses. Of course, the deal will fall through if CureVac's candidate fails. But we could imagine the European Commission considering a deal for the next-generation candidate farther down the road. All of this means there could be share price catalysts ahead.
Will CureVac make you a millionaire?
Let's imagine that CureVac's next-generation vaccine is successful, and the shares climb to about $200 a share -- that's to meet the level of more advanced rival Moderna. If you invested $10,000 at today's price, you would get about 166 shares. If the price rose to $200 a share, your investment would be worth $33,200. That's a solid performance -- but it's far from making you a millionaire.
Only a massive investment in CureVac today may make you a millionaire in the future. And right now, the stock is too risky for that sort of bet. The outlook for its late-stage coronavirus vaccine candidate doesn't look promising. The next-generation candidate does look promising -- but it's early stage.
So, my conclusion is this: Aggressive investors may decide to take a small position in CureVac for its next-generation candidate. But the rest of us are better off waiting for at least a first round of efficacy data from that candidate before making a move.
