Vaccine stocks paved the road to riches for many since the start of the coronavirus pandemic. For example, Novavax (NVAX) soared 2,700% in 2020. And vaccine leader Moderna climbed 1,200% over the past two years. These days, some worry the vaccine stock story may be over. But there's still time to get in on innovative vaccine makers. After all, experts predict the coronavirus will stick around even post pandemic. So, we'll need protection. And that means we'll need vaccines.
Of course, it's impossible to predict with 100% certainty which companies will succeed in the vaccine race -- and whether their share prices will skyrocket. But a good look at their programs offers us some clues about which stocks might make you a fortune this year. Here are three to consider.
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1. Gritstone Bio
Gritstone Bio (GRTS -3.90%) is developing an mRNA vaccine candidate. But there are two elements that help it to stand out from mRNA vaccines of leaders Moderna and Pfizer. First, Gritstone uses self-amplifying mRNA. This means the vaccine can be dosed lower than vaccines using regular mRNA. And second, Gritstone's candidate targets the spike protein and other viral genes. Today's vaccines focus on the spike protein. By targeting a broader range, a vaccine may better handle variants. In fact, an early Gritstone analysis shows this may be the case with the omicron variant.
In more good news, Gritstone recently announced positive phase 1 clinical trial results for the use of its vaccine as a booster. One 10-microgram dose after an AstraZeneca primary series produced strong neutralizing antibody and killer T cell responses in 10 healthy adults. Now, Gritstone aims to enroll 120 individuals and quickly move toward a pivotal study. The whole world needs boosters. And countries have already started "mixing and matching" vaccine brands. So, if Gritstone is successful, it could carve out share in the booster market.
Investors should be prepared for a bumpy ride, however. After Gritstone's great trial news, the shares sank. But for the long-term investor who can tolerate risk, I see this as a buying opportunity. The stock is trading $8 below Wall Street's very lowest 12-month share price forecast. If Gritstone moves closer to commercialization this year, rewards for the company and investors could be big.
2. Vaxart
Vaxart (VXRT -7.99%) has been much slower than rivals in this vaccine race. But it could be worth the wait. The biotech company is working on an oral vaccine candidate. The advantages of a pill are many. First, it's clear many people would opt for a tablet to be taken with a glass of water instead of a shot. Second, a tablet is small and room temperature stable. This makes transport and storage easy and inexpensive. So, if Vaxart is successful, we could be looking at a gamechanger. While other late-to-market players may struggle for market share, Vaxart probably won't.
Here's where Vaxart stands right now. The biotech started a phase 2 trial of its vaccine candidate in the fall and expects to report data in the first quarter of this year. The candidate showed strong killer T cell responses in its earlier human trial. And a trial in hamsters showed the candidate reduced viral shedding more than injectable vaccines. If the same is seen in humans, it could mean Vaxart's candidate actually reduces coronavirus transmission. That could be big news. Vaxart also is beginning studies this month to test its candidate against the omicron variant.
Like Gritstone, Vaxart's shares have suffered in recent times. The stock now is trading about $3 below Wall Street's most pessimistic 12-month share price forecast. Vaxart remains risky. Progress is slow compared to the speed we saw from Moderna and Pfizer back in 2020. And candidate failure is always a possibility. But if Vaxart is successful, the shares could move significantly higher from today's level.
3. Novavax
OK, so I know Novavax already has made a fortune for some investors. As mentioned earlier, it skyrocketed in the early days of the vaccine race. I don't expect Novavax to make that kind of jump again this year. But Novavax is inexpensive today -- It's trading at only about five times forward earnings estimates. And the company is at a critical moment right now. If it succeeds, the stock could climb enough to satisfy just about any investor.
In recent weeks, about 30 countries have authorized Novavax's coronavirus vaccine candidate. Novavax in late December completed its data filing to the U.S. Food and Drug Administration (FDA) and said it would file for Emergency Use Authorization in a month. The next big moment is just ahead. And that's the decision from the FDA. The U.S. may not end up being Novavax's biggest market. After all, Pfizer and Moderna have claimed significant market share. But a nod from the FDA still is a major accomplishment -- and investors may be looking for this before buying Novavax shares.
In any case, recent authorizations signal revenue just ahead. Novavax struggled with manufacturing issues last year as it prepared to submit data to regulators. But if manufacturing goes smoothly during vaccine rollout, there's reason to be optimistic about Novavax's earnings reports -- and share price -- this year.
