The wave of COVID-19, which is affecting the entire global economy, has prompted governments and businesses to race for a vaccine. In this scenario, there are four-figure gains for biotech companies, which are fighting for the development of a vaccine against COVID-19 in the United States.
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Record-breaking: the vaccine race pushes Vaxart’s title to +2500%
The race to develop a vaccine for COVID-19 has increased the market capitalization of major global pharmaceutical groups by $50 billion in 2020, but the biggest impact has been felt by small startups such as Vaxart Inc.
The San Francisco-based company shows a stock market rise of close to 2425%, well above the performance of global market-leading pharmaceutical giants such as Pfizer (-13.80%). The great result of Vaxart Inc. is due to its competitive advantage over its competitors on how to administer the vaccine.
The vaccine developed by the San Francisco-based company will be administered orally, which could facilitate its marketing. This has been included in the U.S. government’s “Open Warp Speed”, which aims to produce 300 million doses by 2021. This announcement has raised the stock quoted in the Nasdaq.
The performance of Vaxart’s shares
The US company’s stock rose from $2.66 per share on June 23rd to $8.04 on Friday, June 26th, the day the federal government announced the selection of the Vaxart vaccine as a test.
The stock at the opening of Wall Street on Monday, June 22nd, after losing some ground compared to the previous Friday, June 19th, closed the last session on Wednesday, June 24th, steadily at $8 per share, an increase of more than 200% over last week’s Wednesday. This positive trend is due to the momentum that began after the announcement that pushed the stock up.
There are other biotech companies that do well on the stock market
However, there are many other companies involved in the development of a vaccine against COVID-19. There are 615 drugs in development and testing worldwide. Of these, 161 are vaccines, 271 are drugs for the treatment of the infection, and 183 are antivirals.
Within this set, there are 17 drugs in human trials to find a vaccine to stop the COVID-19 pandemic, which has infected more than 10.5 million people and caused more than 500,000 deaths to date.
The news of the first vaccine administered on a large scale comes from China. That is the result of a collaboration between the Army Research Unit of the People’s Republic of China and the Hong Kong based startup CanSino Biologics.
From an S&P market intelligence screening, there are 50 companies involved in the race for the vaccine. In addition to 14 large pharmaceutical multinationals such as Pfizer or Sanofi, there are also small companies that through government funding and agreements with large manufacturers are working to find an antidote to COVID-19.
In addition to Vaxart Inc. and CanSino Biologics, there is also Inovio Pharmaceutics, Novax Inc. and Arcturus Therapeutics Holdings Inc.
These businesses have shown an increase in market capitalization, such as Novax Inc, which increased from $90 million at the beginning of the year to $4.2 billion at the end of June, with the possibility of making its first profit next year; or Inovio Pharmaceutics, with a stock market gain of 716% since the beginning of the year, and CanSino Can and Arcturus Therapeutics Inc, which have recorded stock market performance since the beginning of 2020 of +279.73% and +352.5% respectively.
Opportunities in the Biotech sector
The rise in the stock market shares of companies involved in the development of a vaccine against COVID-19 opens up opportunities for market speculation.
Although only 10% of Biotech companies are profitable, the sector has recorded a gain of 471%, which is higher than both the S&P 500 and Nasdaq in the same period (200% and 378% respectively). An incoming speculative bubble? Only the future can reveal it.
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This article may include forward-looking statements. These forward-looking statements generally are identified by the words “believe,” “project,” “estimate,” “become,” “plan,” “will,” and similar expressions. These forward-looking statements involve known and unknown risks as well as uncertainties, including those discussed in the following cautionary statements and elsewhere in this article and on this site. Although the Company may believe that its expectations are based on reasonable assumptions, the actual results that the Company may achieve may differ materially from any forward-looking statements, which reflect the opinions of the management of the Company only as of the date hereof. Additionally, please make sure to read these important disclosures.
First published in Money.it, a third-party contributor translated and adapted the article from the original. In case of discrepancy, the original will prevail.
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