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5 Drug Makers to Gain From Coronavirus Outbreak

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The coronavirus epidemic has become a grave concern, with confirmed cases and fatalities rising across the globe. Drug developers are racing against time to develop a treatment and contain the outbreak that has now spread to nearly 81 countries.

While some drug manufacturers are repurposing old antivirals, some are relying on modern approaches like DNA-based therapies that will give a more futuristic approach to medical science.  

Coronavirus Drug is the Need of the Hour

With no drug, vaccine or cure yet, healthcare officials are relying on preventive measures such as isolation of infected patients and use of masks and gloves. Newer cases across the globe are putting pressure on pharmaceutical companies to develop vaccines or therapy to counter the spread of the disease. (Read more: 4 Healthcare Stocks to Gain as Coronavirus Threat Looms Large)

In fact, on Monday, President Donald Trump, along with the U.S. administration wing specially assigned to deal with the coronavirus outbreak, met executives from 10 pharmaceutical companies. The meeting actually intended to put pressure on the pharmaceutical industry to bring drug prices down turned into a discussion related to the development of a coronavirus vaccine.

With the death toll rising in the United States, Trump emphasized on speeding up work on developing a coronavirus vaccine. However, many including Tony Fauci, the director of the National Institute of Allergy and Infectious Disease, opined that deployment of an effective vaccine may take “a year to a year and a half.”

Given the current pace at which the disease is spreading, many drug makers have already entered into early testing, but at the same time companies cannot overlook the constraints involved in manufacturing such vaccines.

CureVac, a top drug maker, uses messenger RNA to produce protective antibodies inside patients’ bodies, which in turn help in prevention of infection. The company expects to start coronavirus vaccine in healthy volunteers by June.

5 Drug Manufacturers to Watch

Several drug makers are constantly working on development of therapies and vaccines. But only a few of them have made real progress and seem to be prudent investment options in these tumultuous times.

Our first choice is Regeneron Pharmaceuticals, Inc. (REGN - Free Report) , a Zacks Rank #1 (Strong Buy) company, which is advancing into preclinical trials for coronavirus vaccine. The company crafts human antibodies out of genetically engineered mice and hopes to treat coronavirus in the same way. Currently, Regeneron is immunizing its antibody-generating mice with a harmless analog of the novel coronavirus. If results are positive, Regeneron’s candidate will be ready for human testing by late summer.

The company’s expected earnings growth rate for the current quarter is 35.5% against the Zacks Medical - Biomedical and Genetics industry’s projected earnings decline of 70.5%. You can see the complete list of today’s Zacks #1 Rank stocks here.

Moderna, Inc. (MRNA - Free Report) is a clinical stage biotechnology company that has developed mRNA-1273, a vaccine candidate. It is working with the National Institutes of Health on a healthy-volunteer study expected to begin next month. Additionally, the company has joined forces with the Coalition for Epidemic Preparedness Innovations (CEPI) for a vaccine approach.

This Zacks Rank #2 (Buy) company’s expected earnings growth rate for the next quarter is 9.8% against the Zacks Medical - Biomedical and Genetics industry’s projected earnings decline of 70.5%.

DNA-based immune therapy and vaccine developer, Inovio Pharmaceuticals, Inc.  has received grants from CEPI to develop its DNA vaccine, which may generate protective antibodies and protect patients from infection.

This Zacks Rank #3 (Hold) company’s expected earnings growth rate for the next quarter is 23.3% against the Zacks Medical - Biomedical and Genetics industry’s projected earnings decline of 70.5%.

Another drug maker in the limelight is Novavax, Inc. (NVAX - Free Report) . Since the last week of February 2020, the company has begun testing its new coronavirus vaccine candidates in animal models. The findings from the preclinical testing will help Novavax determine an optimal candidate for human studies.

This Zacks Rank #3 company’s expected earnings growth rate for the next quarter is 74.6% against the Zacks Medical - Biomedical and Genetics industry’s projected earnings decline of 70.5%.

Sanofi (SNY - Free Report) is a large-cap pharmaceutical company. It has now collaborated with the US Biomedical Advanced Research and Development Authority (BARDA) to develop vaccine candidates against COVID-19. This Zacks Rank #3 company’s expected earnings growth rate for the current year is 4.8%.

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