Is it too late to invest in the stocks of leading COVID-19 vaccine makers? Not at all. Sure, vaccines are now widely available in the U.S., Canada, and Europe. However, that isn't the case in some other parts of the world, and the emergence of new coronavirus variants could fuel demand for vaccines for a long time to come.
Several drugmakers have already won an Emergency Use Authorization (EUA) from the U.S. Food and Drug Administration (FDA) for their COVID-19 vaccines, with two also picking up full FDA approvals. Some hope to receive authorization or approval in the not-too-distant future.
Here's what you need to know about investing in the top coronavirus vaccine stocks, along with our top vaccine stock picks.
What to know about investing in COVID-19 vaccine stocks
Before investing in a COVID-19 vaccine stock, find out about the status of the company's vaccine. Many companies already have vaccines on the market, while others may or may not win regulatory approvals.
Also learn about any issues the vaccine makers have experienced. Even companies that have obtained the necessary regulatory authorizations can encounter problems that ultimately prevent them from achieving commercial success.
You should also consider a company's other products and pipeline drug candidates. The stocks of drugmakers with other successful products are less risky than companies that don't have other products on the market. While global demand is high right now for COVID-19 vaccines, questions remain about how often boosters will be needed (if at all) once the pandemic is over.
Top vaccine stocks
Here are six top COVID-19 vaccine stocks, plus a couple of others to watch:
Pfizer (NYSE:PFE) made a great decision in 2020 when it teamed up with German biotechnology company BioNTech (NASDAQ:BNTX) to develop a COVID-19 vaccine. The vaccine was the first to win a U.S. EUA and has been the biggest commercial success story so far.
Although the Pfizer vaccine has been a tremendous commercial success, the pharmaceutical company's stock hasn't soared nearly as much as the shares of smaller vaccine makers. Pfizer's size makes it difficult for any single product to substantially change its stock price. The company has also faced headwinds with clinical setbacks for other products. Pfizer will also lose key patents for several drugs later in the decade.
Nevertheless, Pfizer appears well-positioned to deliver solid price growth at least for the next five years or more. The company pays an attractive dividend, making the stock a favorite of income-seeking investors.
As Pfizer's partner, BioNTech (NASDAQ:BNTX) is benefiting from Pfizer's financial resources, global manufacturing capacity, and regulatory expertise. The company's messenger RNA (mRNA) technology was critical to the success of the jointly developed COVID-19 vaccine.
The coronavirus vaccine will primarily drive BioNTech's fortunes in the coming years, with its revenues correlated to the frequency of vaccine booster doses. Aside from the COVID-19 vaccine, the company's lead drug candidate is an experimental mRNA therapy targeting melanoma and other solid tumors. BioNTech's drug pipeline also includes multiple early-stage candidates targeting various types of cancer.
Moderna (NASDAQ:MRNA) quickly followed Pfizer and BioNTech in winning a U.S. EUA for its COVID-19 vaccine. Because the company doesn't have to split profits with a partner, Moderna is likely to make more money from its coronavirus vaccine than either Pfizer or BioNTech.
Moderna's success over the next few years hinges on continuing demand for its COVID-19 vaccine. With the emergence of new coronavirus variants, it's possible that demand will remain strong.
Regarding Moderna's pipeline, the company is evaluating its cytomegalovirus (CMV) vaccine candidate in late-stage testing. Moderna also has 15 other candidates in clinical trials and plans to heavily invest in expanding its pipeline.
4. Johnson & Johnson
Johnson & Johnson's (NYSE:JNJ) COVID-19 vaccine was the third to secure U.S. authorization. Unlike the Pfizer-BioNTech and Moderna vaccines, J&J's vaccine takes full effect after only a single dose. However, the FDA has authorized a booster dose for J&J's vaccine.
The company is selling its COVID-19 vaccine at cost during the pandemic, meaning that it doesn't affect the company's profitability for now. Far fewer doses of J&J's vaccine have been administered so far compared to the Pfizer-BioNTech and Moderna vaccines. This gap is due to several factors, including a lower overall efficacy for J&J's vaccine and some rare blood-clotting issues.
J&J is so big that its success doesn't depend on any one product. The company's diversified operations across healthcare and its status as a Dividend King position Johnson & Johnson stock as one of the safest stock picks for long-term investors.
Granted, Johnson & Johnson won't be quite as big in the future. The healthcare giant plans to spin off its consumer unit in 2023. However, this move will leave J&J with its two fastest-growing segments, pharmaceutical and medical devices. The positives for this stock should remain intact.
AstraZeneca (NASDAQ:AZN) was an early favorite to be the biggest winner in the COVID-19 vaccine race. In 2020, the U.K.-based drugmaker secured a supply agreement with the U.S. government for 300 million doses, which was the largest deal in the works at the time.
AstraZeneca's coronavirus vaccine still isn't available in the U.S., though. The company secured regulatory approval for its vaccine in Europe, but the relationship between AstraZeneca and the European Union has been a rocky one. AstraZeneca and the EU were embroiled in litigation over allegations that the drugmaker failed to fulfill its supply commitments before reaching a settlement in September 2021.
Struggling with its COVID-19 vaccine isn't a critical blow to AstraZeneca. The drug company's lineup includes several products with strong sales growth, especially its cancer drugs Imfinzi and Lynparza. Its drug pipeline is also well-developed and features a large number of late-stage candidates.
Novavax (NASDAQ:NVAX) lags behind the other vaccine makers. So far, its COVID-19 vaccine has won authorizations or approvals in multiple major markets, including the European Union, Great Britain, and Canada. However, Novavax still awaits a decision from FDA on an EUA for its vaccine.
While Novavax is currently trailing several of its larger rivals, it could still be a big winner in the COVID-19 vaccine market. The company has advanced a combination COVID-19/flu vaccine into early clinical testing. This combo vaccine includes Novavax's NanoFlu influenza vaccine. In a late-stage, direct-comparison study, NanoFlu proved more effective than the leading flu vaccine, Fluzone Quadrivalent.
Vaccine growth stocks
Many other experimental COVID-19 vaccines are in development. A couple to consider are:
- Ocugen (NASDAQ:OCGN): This drug company is partnered with Bharat Biotech, an Indian drugmaker with a COVID-19 vaccine already authorized for use in India. Ocugen is hoping to obtain regulatory approval in the U.S. and authorization in Canada for its vaccine, which is called Covaxin.
- Vaxart (NASDAQ:VXRT): This small company is evaluating an oral COVID-19 vaccine tablet in phase 2 testing.
Ocugen and Vaxart aren't currently among the top tier of COVID-19 vaccine makers, but these biotech stocks could experience the greatest price appreciation if their experimental vaccines win regulatory approvals. Their fortunes are likely to significantly improve if the vaccines provide effective protection against emerging coronavirus variants.