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Living in California where we have had the fourth-highest amount of cases of any state, I've seen firsthand the dramatic impact of the coronavirus on our daily lives.
Of course, some cities have started to open back up, but it has not been a great start. There's still plenty of uncertainty out there. Cases have risen in Houston, and Virginia just reported its highest per-day increase of COVID-19 cases.
This is why the need for a vaccine is so important and why the biopharma industry has received such close attention by the public and investors over the last few months.
The Massive Profit Potential for Coronavirus Vaccines
Since the start of the pandemic, we have seen almost 100 companies and universities across the world announce the development of vaccines to protect against this disease.
The site Clinicaltrials.gov, which is a database of privately and publicly funded clinical studies, shows over 1,500 studies and trials are underway for COVID-19. From giant pharmaceutical companies all the way down to small biotechs, everyone is headed toward the same goal.
With all the money coming into this space, it has helped many of these biotech companies get up and running faster than ever before. In fact, we have recently seen some of these small biotech companies skyrocket over 100% with announcements around vaccine trials and early results.
While this may sound like a big jump, with billions of people potentially needing a vaccine, we are still in the early innings of curing this disease. Most companies are researching a vaccine or have just started phase 1 trials, which is the beginning of a process that could end up taking over a year. Experts, including the U.S. Federal Reserve Chair Jerome Powell, also believe that complete economic recovery is only possible once a vaccine against the novel coronavirus is discovered.
Even though several companies may make it past their phase 1 trials, historically, just 6% of vaccine candidates end up making it to market.
This is why I've done hundreds of hours of research into every one of these potential vaccines.
During my search for the best-positioned drugs, I've also identified companies that you should stay away from because it's just as important to know the companies to stay away from as it is the companies with the best opportunity to develop a cure.
Putting Coronavirus Cures Under the Microscope
On May 18, Moderna Inc. (NASDAQ: MRNA) announced that it had positive interim phase 1 data for its mRNA vaccine (mRNA-1273). Shortly after this announcement containing limited data, its stock price rose almost 30%. That evening, after the stock had risen considerably, Moderna announced it planned to raise $1.25 billion in a secondary offering.
Now this may not raise any red flags on the surface, but having dug through the data, I decided to stay away from this one.
The first issue for me was that there were no significant details on the study, and nothing was published in a journal. On top of that, the study only involved 45 participants, which is a very small scale.
Secondly, I always look at the history of a company. While Moderna has other vaccines in its pipeline, it has never brought a drug to market based on mRNA technology.
As a former journalist, I decided to dig in even further into the stock offering and saw that executives of the company have sold nearly $30 million of stock after the offering.
While these sales were executed under a 10b5-1 trading plan and were not breaking any rules, I always like to invest with executives who keep their money in the company as a sign of faith in what they are doing.
We saw a big jump in Sorrento Therapeutics Inc. (NASDAQ: SRNE), another company looking to develop a vaccine, and not a single executive sold stock after it rose over 100%. For these reasons, I have decided that there are other companies conducting trials that I would rather invest in.
Take Merck & Co. Inc. (NYSE: MRK), the $200 billion multinational pharmaceutical company.
It has recently made three major announcements. It announced two vaccine candidates with partners Ridgeback Bio and IAVI, and plans to acquire Themis Bioscience, a company focused on vaccines and immune modulation therapies for infectious diseases.
While Merck has been relatively quiet up until now, CEO Ken Frazier stated that he was "waiting for opportunities with a proven track record" and in a single dose. This is a much different strategy than many of the biotech companies looking to develop a vaccine.
Given Merck's background in developing vaccines, including its recent Ebola vaccine, it could be very well positioned in finding a working vaccine for COVID-19.
As I mentioned earlier, only a few vaccines in trial may make it to market, so I make sure to spend hundreds of hours of research into dozens of companies in order to identify the drugs that have the best chance of helping millions of people.
I have even spoken with CEOs on the state of their vaccines to find out who may be the best candidate to get a vaccine to market.
And this is exactly why I've put together a special presentation…
You see, over 70 firms are racing to produce the most critical vaccine of all time, but only one of them can give you a shot at making 3,000%…
About the Author
Michael A. Robinson is a 36-year Silicon Valley veteran and one of the top tech and biotech financial analysts working today. That's because, as a consultant, senior adviser, and board member for Silicon Valley venture capital firms, Michael enjoys privileged access to pioneering CEOs, scientists, and high-profile players. And he brings this entire world of Silicon Valley "insiders" right to you...
- He was one of five people involved in early meetings for the $160 billion "cloud" computing phenomenon.
- He was there as Lee Iacocca and Roger Smith, the CEOs of Chrysler and GM, led the robotics revolution that saved the U.S. automotive industry.
- As cyber-security was becoming a focus of national security, Michael was with Dave DeWalt, the CEO of McAfee, right before Intel acquired his company for $7.8 billion.
This all means the entire world is constantly seeking Michael's insight.
In addition to being a regular guest and panelist on CNBC and Fox Business, he is also a Pulitzer Prize-nominated writer and reporter. His first book Overdrawn: The Bailout of American Savings warned people about the coming financial collapse - years before the word "bailout" became a household word.
Silicon Valley defense publications vie for his analysis. He's worked for Defense Media Network and Signal Magazine, as well as The New York Times, American Enterprise, and The Wall Street Journal.
And even with decades of experience, Michael believes there has never been a moment in time quite like this.
Right now, medical breakthroughs that once took years to develop are moving at a record speed. And that means we are going to see highly lucrative biotech investment opportunities come in fast and furious.
To help you navigate the historic opportunity in biotech, Michael launched the Bio-Tech Profit Alliance.
His other publications include: Strategic Tech Investor, The Nova-X Report, Bio-Technology Profit Alliance and Nexus-9 Network.