With a strong propensity for mutation and vaccine resistance, coronavirus has remained one of the biggest threats to the global economy since last year. The highly transmissible Delta variant has resulted in reduced vaccine efficacy, highlighting the need for “booster shots.” Chief Medical Advisor to President Biden, Dr. Anthony Fauci, recently observed that the United States could emerge from the pandemic by spring 2022, extending his earlier projection that the country could control the virus outbreak by summer this year.
Last week, the FDA gave its full approval to the Pfizer-BioNTech vaccine, paving the way for greater vaccine mandates as schools, universities, and businesses gradually reopen. The U.S. is now gearing up to r distribute COVID-19 booster shots nationwide beginning in September.
The global COVID-19 vaccine market is expected to reach $73.78 billion by 2028, growing at a 7.3% CAGR. Thus, fundamentally sound companies Moderna, Inc. (MRNA), Gilead Sciences, Inc. (GILD), BioNTech SE (BNTX), and Regeneron Pharmaceuticals, Inc. (REGN), which have COVID-19 related products in their portfolios, are expected to generate solid growth.
Moderna, Inc. (MRNA)
MRNA is a biotechnology company that develops and sells vaccines for infectious, auto-immune, immuno-oncology, cardiovascular, and other rare diseases based on messenger RNA biotechnology. The Cambridge, Mass., company shares strategic alliances with notable vaccine producers, such as AstraZeneca PLC (AZN).
On August 25, MRNA submitted its Biologics License Application (BLA) to the U.S. Food and Drug Administration (FDA) for its Moderna COVID-19 vaccine for adults. With durable efficacy at 93%, the BLA license should help MRNA expand its vaccine reach globally.
MRNA announced on August 18 that it had decided to expand its business alliance with Azzur Group company’s Azzur cleanrooms on demand. Regarding this relationship, Moderna's Senior Director of Clinical Manufacturing, Jason Ellow, said, “Our relationship with Azzur over the years has been excellent and is one that Moderna is happy to expand upon. Cleanrooms on Demand will allow us to bring online new space, and let us focus on building our team, developing and improving our processes, and delivering products to the clinic."
On August 16, the company revised its supply agreement with the Canadian government to provide 105 million vaccine doses and booster shots over the next three years.
MRNA’s total revenue increased 6,398.5% year-over-year to $4.35 billion in its fiscal second quarter, ended June 30. Its net income increased 2,476.1% year-over-year to $2.78 billion. Its EPS came in at $6.46, indicating a 2,183.9% rise from the prior-year quarter.
Analysts expect MRNA’s EPS to increase 1,696.6% year-over-year to $9.42 in the current quarter (ending September 2021). The Street’s $6.45 billion revenue estimate for the same period reflects an 8,216.6% increase year-over-year. The company’s stock has advanced 254.8% in price year-to-date to close yesterday’s trading session at $370.69. MRNA’s strong fundamentals are reflected in its POWR Ratings. The stock has an overall B rating, which equates to Buy in our proprietary rating system. The POWR Ratings are calculated by considering 118 different factors, with each factor weighted to an optimal degree.
MRNA has a Growth, Value, and Quality grade of B. In the 508-stock Biotech industry, it is ranked #30.
Click here to see additional POWR Ratings for MRNA (Momentum, Stability, and Sentiment).
Gilead Sciences, Inc. (GILD)
GILD is a pharmaceutical company that produces and sells medicines to meet the unmet medical needs of patients suffering from life-threatening diseases like HIV globally and in the United States. It is based in Foster City, Calif.
On August 19, GILD announced that its Market Authorization Application (MAA) with respect to lenacapavir, an HIV-1 treatment drug, had been fully accepted by the European Medicines Agency (EMA). Merdad Parsey, Chief Medical Officer, Gilead Sciences, said, "The MAA validation is a step forward in our commitment to a patient-centered approach to helping all individuals living with HIV achieve and sustain viral load suppression, irrespective of their prior treatment history."
GILD drug Veklury® (Remdesivir) received FDA approval on October 22 of last year, becoming the first drug to be administered to cure coronavirus in the U.S. On July 21, it was reported that Remdesivir can reduce hospital stays for COVID patients to 28 days after just five days of drug treatment and can reduce risk of mortality. The results have been consistent across patients in different geographies.
GILD’s revenue for the second quarter, ended June 30, increased 20.9% year-over-year to $6.22 billion, which can be attributed to $829 million in Veklury® sales. Its non-GAAP product gross margin rose 210 basis points from the same period last year to 86.4%. Its non-GAAP operating income improved 59.2% year-over-year to $3.18 billion, while its non-GAAP EPS increased 68.5% year-over-year to $1.87.
The Street’s $7.13 EPS estimate for the current year indicates a slight increase from the same period last year. GILD’s revenue is expected to increase 1.2% year-over-year to $24.98 billion in the current year. The stock has surged 23.6% in price year-to-date to close yesterday’s trading session at $72.01.
Under POWR Ratings, GILD has a Value grade of A, and a Quality grade of B. It is ranked #13 out of 508 stocks in the Biotech industry.
To see additional POWR Ratings for Growth, Momentum, Stability, and Sentiment for GILD, click here.
BioNTech SE (BNTX)
BNTX operates as an immunotherapy company that develops therapies for cancer and other patients affected with serious diseases. The company and its notable collaborators like Pfizer Inc. (PFE) are designing and manufacturing mRNA vaccines for infectious diseases. BNTX’s headquarters are in Mainz, Germany.
On August 26, PFE and BNTX signed a letter of intent with Brazilian pharmaceutical firm Eurofarma Laboratórios SA to manufacture COVID-19 vaccine in Latin America and subsequently across four continents in more than 20 manufacturing facilities. The annual production of the PFE and BNTX COVID-19 vaccine is expected to cross 100 million.
On August 23, BNTX and PFE received full FDA approval for their COMIRNATY® vaccine to be administered in individuals aged 16 or older. The vaccine became the first of its kind to achieve this approval. "Today's full approval by the FDA underlines the vaccine's high efficacy and favorable safety profile," said Ugur Sahin, CEO, and Co-founder of BioNTech.
In its fiscal second quarter, ended June 30, BNTX’s revenue increased 12,630.2% year-over-year to €5.31 billion ($6.26 billion). Its operating income and profit before tax came in at €4.20 billion ($4.95 billion) and €4.02 billion ($4.75 billion), respectively, representing a substantial rise from the negative year-ago values. Its EPS improved 2,934.2% from the prior-year quarter to €10.77 ($12.72).
The $35.39 consensus EPS estimate for the current year reflects a 50,457.1% improvement from the same period last year. Likewise, the $16.95 billion consensus revenue estimate for the current year represents a 2,772.4% increase year-over-year. The stock has gained 323.2% in price year-to-date and 228.6% in the last six months.
It’s no surprise that BNTX has an overall B rating, which translates to Buy in our POWR Ratings system. In addition, BNTX has an A grade for Sentiment, and a B grade for Growth, Value, and Quality. The stock is ranked #20 in the Biotech industry.
In addition to the POWR Ratings we’ve highlighted, one can see the BNTX ratings for Momentum and Stability here.
Regeneron Pharmaceuticals, Inc. (REGN)
REGN in Tarrytown, N.Y. is a biotechnology company that provides medicines treating ailments that include eye diseases, inflammatory and hematologic conditions, and infectious diseases such as Ebola and COVID-19.
On August 30, REGN and its partner Sanofi (SNY) announced the completion of their phase-3 trials for Dupixent®, a drug administered to cure atopic dermatitis, a chronic skin disease seen mostly in children. The trial revealed that the drug has the capacity to cure the condition in children between the ages of 6 months to 5 years. The drug has significant potential for young patients.
REGN declared on August 20 that it had been granted a Conditional Marketing Authorization (CMA) permit by the United Kingdom’s Medicines and Healthcare products Regulatory Agency (MHRA) for its vaccine cocktail for COVID-19 known as Ronapreve®. This news came after Emergency Use Authorization (EUA) approval was expanded upon for the same antibody cocktail known as REGEN-COV™ in the United States on July 30. The vaccine cocktail protects individuals from SARS-CoV-2.
REGN’s revenue climbed 163.2% year-over-year to $5.14 billion in its fiscal second quarter, ended June 30. Its non-GAAP net income stood at $2.90 billion, indicating a 238.8% increase year-over-year. Its non-GAAP EPS improved 260.3% from the prior-year quarter to $25.80.
Analysts expect its EPS to come in at $9.07 for the current quarter (ending September 2021), indicating an 8.5% increase year-over-year. The Street’s $2.69 billion revenue estimate for the same period reflects a 28.8% increase year-over-year. Furthermore, REGN has an impressive earnings history; it has topped consensus EPS estimates in each of the four trailing quarters. REGN has increased 45.8% in price in the last six months to close yesterday’s trading session at $677.08.
REGN’s POWR Ratings reflect this promising outlook. The stock has an overall B rating. which equates to Buy. REGN also has a B grade for Growth, Value, Sentiment, and Quality. In addition, the stock is ranked #10 in the Biotech industry.
We also have graded REGN for Momentum and Stability. Click here to access all REGN’s ratings.
Note that REGN is one of the few stocks handpicked by our Chief Value Strategist, David Cohne, currently in the POWR Value portfolio. Learn more here.
MRNA shares were trading at $375.11 per share on Tuesday afternoon, up $4.42 (+1.19%). Year-to-date, MRNA has gained 259.06%, versus a 21.68% rise in the benchmark S&P 500 index during the same period.
About the Author: Anushka Dutta
Anushka is an analyst whose interest in understanding the impact of broader economic changes on financial markets motivated her to pursue a career in investment research.4 Coronavirus Stocks That Are Still Worth Buying appeared first on StockNews.com