Is it too late to invest in the stocks of leading COVID-19 vaccine makers? Not at all. Sure, the situation in the U.S. is looking much better as a result of the widespread availability of vaccines. However, the outlook isn't nearly as good in other parts of the world. And the emergence of new coronavirus variants seems likely to fuel demand for vaccines for a long time to come.
Several drugmakers have already won Emergency Use Authorization (EUA) from the U.S. Food and Drug Administration (FDA) for their COVID-19 vaccines. Others might soon receive the same approval. 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.
Top vaccine stocks
These 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. That vaccine was the first to win U.S. EUA and has been the biggest commercial success story so far.
Although the Pfizer vaccine is proving profitable, the pharmaceutical company's stock hasn't appreciated proportionally in value. Pfizer's size makes it difficult for any product to substantially change its stock price, and some of the company's other products have experienced clinical setbacks. Pfizer will also lose key patents for several drugs later in this decade.
Nevertheless, Pfizer appears well-positioned to deliver solid price growth at least for the next five years or more. The company also pays an attractive dividend, making the stock a longtime favorite of income-seeking investors.
As Pfizer's partner, BioNTech 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 with how frequently booster doses of its vaccine are needed. 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 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 recurring demand for its COVID-19 vaccine. With the emergence of new coronavirus variants, it seems likely that demand will remain strong.
Regarding Moderna's pipeline, the company expects to advance its cytomegalovirus (CMV) vaccine candidate into late-stage testing in 2021. Moderna also has a dozen other candidates in phase 1 or phase 2 clinical trials and plans to heavily invest in further 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.
The company has experienced manufacturing problems at a contractor's facility, and concerns about blood clotting caused a temporary halt in the U.S. of the vaccine's administration, although these issues aren't overly concerning for investors. Johnson & Johnson is selling its COVID-19 vaccine at cost during the pandemic, meaning that it doesn't much affect the company's financial performance.
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.
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, at the time the largest deal in the works.
AstraZeneca still hasn't won EUA for its coronavirus vaccine in the U.S. It's embroiled in litigation with the European Union after allegedly failing to fulfill its supply commitments despite securing regulatory approval.
However, struggling with its COVID-19 vaccine definitely 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, with more than 25 late-stage candidates.
Novavax (NASDAQ:NVAX) hasn't yet won any authorization or approval for its COVID-19 vaccine. Following a late-stage clinical study conducted in the U.S. and Mexico, the company reported an overall efficacy of 90.4% for its experimental coronavirus vaccine. Novavax expects to file for regulatory authorizations in the U.S., U.K., and Europe in the third quarter of 2021.
While Novavax is currently lagging behind several of its larger rivals, it could still be a big winner in the COVID-19 vaccine market. The company hopes to advance a combination COVID-19/flu vaccine to clinical testing later in 2021. Its NanoFlu influenza vaccine, in a late-stage direct-comparison study, 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 helping to obtain regulatory approval in the U.S. for the vaccine, called Covaxin. Since Ocugen plans to seek full FDA approval for Covaxin rather than filing for EUA, the company will likely have to conduct a clinical study of Covaxin in the U.S.
- Vaxart (NASDAQ:VXRT): This small company expects to advance its COVID-19 vaccine, which is effective with just a single dose and administered orally, into phase 2 testing in 2021.
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 prove safe and effective. Their fortunes are likely to significantly improve further if their vaccines provide effective protection against emerging coronavirus variants.