The biotech sector has been on fire thanks to speculation about a potential coronavirus vaccine. Take a close look at the sector’s POWR Ratings and you will find many of these stocks are rated quite highly. Part of the sector’s rise is undoubtedly attributed to the work toward developing a coronavirus vaccine yet biotech has also become a safe haven of sorts where worried investors park their money during uncertain times.
It appears as though investors’ new mantra is “When in doubt, opt for tech.” After all, biotech and tech as a whole has infinite potential while most other spaces have inherent limitations. REGN, BIIB, INO and NVAX are worth paying particularly close attention to in the biotech sector.
Regeneron Pharmaceuticals (REGN)
Now that the coronavirus is washing across the globe, biotech stocks appear to be some of the best investments. REGN shines particularly bright with As across the POWR Ratings board. The POWR Ratings rank REGN third of 336 stocks in the biotech sector.
Though REGN is currently priced at a lofty $548, the upper end of the analysts’ price target is $657. REGN scientists are hard at work developing a vaccine candidate for COVID-19. However, a potential coronavirus vaccine is only one piece of this company’s business pie. REGN’s eczema treatment, dubbed Dupixent, has been quite the success. REGN also develops cancer immunotherapy and arthritis drugs.
If REGN’s clinical study of its coronavirus treatment (REGN-COV2) goes well this June, the stock is sure to take off.
Novel therapies are necessary for treating the seemingly endless number of medical maladies including the coronavirus. BIIB has partnered with Vir Biotechnology to create and manufacture a potential treatment for the virus.
Though Vir is a fairly small biotech firm, it can lean on BIIB for the production of the drug candidate. If even the slightest bit of good news comes out of either camp, BIIB will pop. BIIB has the endorsement of none other than Warren Buffet so it is sure to receive considerable attention in the quarters to come.
Aside from progress on the COVID-19 front, BIIB is also making headway in therapy for Alzheimer’s disease with the anticipation that its Aducanumab treatment will be approved for use in the near future.
If you are skittish about this stock, look no further than the POWR Ratings. BIIB is rated as a B (Buy) with an A Trade Grade, an A Peer Grade and an A Industry Rank grade. Take a chance by rolling with Buffet on BIIB and you stand a good chance of winning.
Inovio Pharmaceuticals (INO)
Have you ever heard of electroporation? If you are like most people, you struggle to pronounce this word, let alone understand it. Electroporation is INO’s specialty. This technology is the use of short pulses of electricity to boost cells’ uptake of helpful biopharmaceuticals.
INO’s stock was priced at $3 this time last year, soared to $14 this past March and now trades at $16.05. The recent spike is the result of hype surrounding INO’s potential treatment for coronavirus. The company recently finalized enrollment in an initial trial of its coronavirus vaccine that has shown promise in animal studies. We will get word of the company’s phase 1 trial outcome in late June.
INO’s spin on a potential COVID-19 treatment modality is quite unique, relying on the use of DNA plasmids as opposed to injecting a weakened form of the virus into the body. The POWR Ratings are quite bullish for INO. The stock has As and Bs across the board but for a C Buy and Hold Grade.
The rapid development of an effective and affordable vaccine is the name of the game now that the world has been quarantined amidst the pandemic. NVAX specializes in value-added, differentiated vaccines for infectious diseases.
The POWR Ratings have NVAX ranked 33 of 336 stocks in the Biotech space. NVAX has an A in every POWR Rating component but for the Buy and Hold component in which it has grades out as a B.
Aside from NVAX’s coronavirus vaccine candidate, the company is also making headway in a regulatory filing for a flu vaccine dubbed NanoFlu. If either vaccine makes it to the market, NVAX will likely hit new heights.
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REGN shares were unchanged in premarket trading Thursday. Year-to-date, REGN has gained 53.64%, versus a -7.20% rise in the benchmark S&P 500 index during the same period.
About the Author: Patrick Ryan
Patrick Ryan has more than a dozen years of investing experience with a focus on information technology, consumer and entertainment sectors. In addition to working for StockNews, Patrick has also written for Wealth Authority and Fallon Wealth Management. More...