Don't expect omicron to be the last coronavirus variant. That's the warning from the head of the World Health Organization. It would be great for the world if this prediction doesn't come true. In this Motley Fool Live video, recorded on Jan. 26, though, Fool contributors Keith Speights and Brian Orelli discuss six stocks that could soar if new coronavirus variants emerge.
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Keith Speights: Moving to the next topic... World Health Organization head and I'm going to butcher his name here, I apologize, Tedros Adhanom Ghebreyesus, recently warned that current conditions across the world could mean that more coronavirus variants will emerge.
Brian, first of all, do you agree with this take and second, if he's right, what are some stocks you think can move significantly higher if there's an emergence of more coronavirus variance?
Brian Orelli: I think it's completely right. As [Dr. Anthony] Fauci is fond of saying, "if it can't replicate, it can't mutate." That's because the replication process isn't 100% accurate and so some of the mutations that are caused during the replication process will end up being deleterious.
But some of them will actually be beneficial to the virus and the beneficial ones will be selected for. They might replicate faster or they might be more infectious going from one host to the next host or they might have mutations that help them evade the immune system. Those mutations will end up outcompeting the parent variant.
Then we have the potential for new variants. We have billions of people that are unvaccinated right now. That's what the WHO head was talking about, that are ripe to be hosts for these potential new variants.
His argument -- and I think it's completely valid -- is that we need to get those people vaccinated as quickly as possible. If we don't give them vaccinated, we're risking the Western world where we are vaccinated, having a new variant that our vaccines no longer work for.
Then what companies might benefit. Well, obviously vaccine makers, Pfizer (PFE -0.72%), BioNTech (BNTX 1.03%), Moderna (MRNA -1.55%) will benefit because they can potentially come up with new versions that are specific for this potential new variant. But even laggards like Novavax (NVAX -7.90%) could benefit because the need to protect against the new variant resets to the clinical time frame and Novavax can go into the clinic basically at the same time as Pfizer and BioNTech and Moderna.
The other obvious beneficiaries is test makers. I think Abbott (ABT -1.10%) is big in the at-home market. Fulgent Genetics (FLGT 1.74%) is a big player in the laboratory test market. I think those would both benefit.
Then potentially companies developing treatments, assuming the mutations of the new variants don't inactivate the treatment, don't make the variant resistant to the treatment. Those would obviously benefit.
Then we've seen that happen with antibodies treatments for omicron that they haven't worked. It depends on where the mutations are. The mutations on the outside of the protein are going to affect the antibodies where mutations on the enzymes that help the virus replicate are going to potentially be hurt. The drugs like Pfizer's drug that inhibits an enzyme that helps the virus replicate.
Speights: Brian, you and I have been saying for weeks now, as vaccine stocks fell, investors were looking beyond the omicron surge and thinking, "Hey, everything's going to be better soon." Maybe, and we hope so, but don't discount the possibility that coronavirus is going to be with us for a long time to come.