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Don’t buy stock market noise around coronavirus vaccination and treatment companies



That’s why some drug stockpile experts say people shouldn’t bet on winners and losers in vaccines.

And just this week, Eli Lily (LLY), the maker of an antibody cocktail advertised by President Trump after being diagnosed and treated by a coronavirus, said he was also stopping a clinical trial.
Both companies have also applied for approval for emergency use for their treatment with the Food and Drug Administration.
Trump has ties to drugmaker Regeneron - and now his stockpile is growing
Drug manufacturers and biotechnologists are understandably working hard to try to offer a vaccine or treatment for Covid-19.
Pfizer (PFE),, BioNTech (BNTX),, GlaxoSmithKline (GSK),, Novavax (NVAX) and Modern (MRNA) are some of the other leading vaccine companies. All of them also received funding from the US government’s Warp Speed ​​program.

But investors should probably not rush these stocks in the hope that one of them will be the first to come up with a successful vaccine.

Vaccines may not be as beneficial to Big Pharma and biotechnology

For Big Phrama companies, the vaccine is unlikely to move the financial needle, so to speak.

“Larger companies like Pfizer and J&J are not looking to make a lot of money from vaccines,” said Kyle Dennis, founder of Biotech Tader at RagingBull’s website.

Dennis noted that most vaccine manufacturers will end up with government-agreed contracts. So the vaccine is unlikely to be a big generating revenue or profit.

Investors should also be wary of stockpiles of Covid-19 vaccines and treatments, simply because many have already risen to hope and publicity.

Regeneron has grown by more than 60% this year. Moderna and another small biotechnology called Inovio will increase by about 300% in 2020.

And Novavax (NVAX) has jumped to an incredible 2840% – from about $ 4 in early 2020 to a current price of $ 117.
“I’m skeptical of Kovid’s so-called plays. I personally would avoid them all. They’re all overrated. Even successful companies can be overrated,” said Brad Loncher, a biotech investment expert who manages ETF for cancer immunotherapy (CNCR) and Chinese Biopharmaceutical ETF (CHNA).

“There are a lot of people who aren’t traditional biotech investors who throw money at headlines but don’t do their homework to understand the math of what financial gain will be,” Lonchar added.

Lonchar agreed with Dennis that few, if any, health companies would generate significant long-term revenue or gains from vaccine or treatment.

He also said that the vaccine is ultimately more important than drugs that can relieve the symptoms of Covid-19.

“We need to have a vaccine. This is our ticket to it. We will not fill football stadiums with 80,000 people until a vaccine is given,” Lonchar said.

But hopes of having at least one (if not more) vaccine ready in the next few months may be too ambitious. Dennis noted that because biotechnology and major pharmaceutical companies are moving so fast to develop a coronavirus vaccine, there are likely to be more failures in clinical trials.

“It’s an aggressive schedule, so it’s a little unsettling. Given these schedules, we’ve never produced a vaccine so fast. So there are risks,” Dennis said.

Cancer treatment is more profitable than Covid-19

Investors need to focus more on other diseases, Loncar said.

For example, Loncar owns Moderna and BioNTech because of their tube of cancer drugs, as opposed to coronavirus vaccines. He also owns shares of Gilead Sciences (GOLD)whose drug remdezivir was also used to treat Covid-19.
However, Lonchar noted that he is mainly a bull with Gilead because of his portfolio of cancer drugs. Last month, the company announced it was buying oncology biotechnology Immunomedicine (IMMU) for $ 21 billion.

“The Gilead deal shows that it is planned for the time after Kovid,” Lonchar said.

Dennis also said that investors should focus more on cancer and other serious diseases than Covid. He recommends biotechnology TG Therapeutics (TGTX) and Karyopharm therapy (KPTI). Dennis also likes it Global blood therapy (GBT)which he told CNN Business he owns.

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