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Is This the Best Buy Among the Vaccine Stocks?

Many investors have amassed a fortune since the pandemic started in the early months of 2020 by betting on COVID-19 vaccine candidates. Moderna (MRNA), for example, has skyrocketed to over 1,500% since last year.

However, there was an even bigger winner: Novavax (NVAX).

Novavax shares actually rose by a jaw-dropping 4,000% since the COVID-19 pandemic began, with the company’s wild rollercoaster ride still not reaching its end anytime soon.

In fact, Novavax has been quite volatile in 2021, rising by more than 180% in early February only to have most of those gains practically wiped out a mere three months after.

Then, the stock managed to show off a strong rebound over the following months. Since early September, though, Novavax’s share price has fallen by over 35%.

While these can be discouraging for some investors, I think that the befuddling gyrations that had us reeling in the past months tell a different story: We might have just discovered the biggest bargain among the leading COVID-19 vaccine stocks in the market today.

There are two possible reasons for the Novavax selloff recently.

The first is the company’s delayed filing of its own COVID-19 vaccine candidate, NVX-CoV2373. This is particularly frustrating considering that Novavax has failed to meet its deadlines multiple times now.

Nonetheless, I prefer to look at these delays as mere speed bumps than actual roadblocks that hinder the company from achieving its goal.

After all, the issue is not on the vaccine’s safety and efficacy—the results have been proven to be highly compelling—but on manufacturing concerns, which can eventually be resolved.

The second reason is the recent update from Merck (MRK) and its partner, Ridgeback Biotherapeutics, on their COVID-19 pill. Of the two, I find this reason to be an overreaction by the market.

None of the vaccine developers should ever be negatively affected by Merck’s oral treatment. While some people might choose not to get the vaccine if and when the pills become available, practically all governments worldwide are still committed to vaccinating their citizens.

Moreover, the COVID-19 vaccines will probably be necessary every year.

When Novavax gets the required authorizations, the company is set to generate a boatload of cash. The biotechnology company is anticipating to supply up to 200 million doses in the European Union alone.

The entire COVID-10 vaccine market is projected to be worth $115 billion by the end of 2021. Moderna is estimated to deliver up to 3 billion doses, while Novavax is expected to produce up to 2 billion doses by 2022.

The rest of the anticipated 14 billion doses will be divided among the other vaccine makers.

Among them, though, Novavax is expected to be the stand-out.

For one, its vaccine candidate appears to be the most robust and affordable at $16 per dose compared to Moderna’s $25.50 and Pfizer-BioNTech’s $22.80.

The growing number of reports on the side effects of mRNA vaccines, which are said to be of a higher rate than Johnson & Johnson’s (JNJ) candidate, can also be a turnoff for many people.

Since Novavax uses a more traditional and familiar vaccine technology—the same one used for the flu, HPV, and Hepatitis B—it causes lower side effects rates.

More importantly, these are mild symptoms like muscle pain and fatigue compared to the heart inflammation concerns raised among those jabbed with Moderna or Pfizer vaccines.

While the side effects from the other two occur in relatively small populations, Novavax is anticipated to be perceived as the more reassuring option, especially for people who are still uneasy with the new technology of mRNA vaccines.

More importantly, Novavax can offer a solution to the global problem of vaccine hesitancy for COVID-19.

To offer a context on how important this is, 48% of Russians and 27% of Americans refuse to take the vaccines.

As of September, only 181.2 million individuals in the US, or 55.1% of the country’s population, have agreed to be fully vaccinated. Needless to say, overcoming this hesitancy would be a massive relief for everyone.

Apart from its COVID-19 vaccine, Novavax has also been working on an influenza vaccine candidate, NanoFlu.

Recently, results from the NanoFlu clinical trials showed that it’s way more effective than the leading brand today, Sanofi’s (SNY) Fluzone Quadrivalent.

If NanoFlu gains approval, this will be another huge growth driver for Novavax.

To put it in perspective, Sanofi’s Fluzone generated $2.9 billion in sales in 2020—a market that Novavax can also tap into and might even dominate.

Meanwhile, the flu vaccine market in the US alone continues to expand.

From 2020 to 2021, the number of flu vaccines administered rose by 11% year over year to reach 193.8 million doses. That’s roughly 59% of the US population—a country that’s only 7th place in terms of the global rates of flu vaccination.

That signifies a colossal market opportunity worldwide for Novavax to capitalize.

At this point, Novavax has yet to secure any approval or official authorization for NVX-CoV2373 or NanoFlu—and that’s the best reason to add this stock to your portfolio.

Investors are given a chance to seize shares of the stock while it’s still in the stage where its most lucrative catalysts are just lurking around the corner.

novavax covid

November 2, 2021/by Mad Hedge Fund Trader

October 7, 2021

Biotech Letter

Mad Hedge Bitcoin Letter
October 7, 2021
Fiat Lux

Featured Trade:

(A RARE BLUE-CHIP STOCK IN DEEP VALUE TERRITORY)
(MRK), (NVAX), (MRNA), (BMY), (XLRN)

October 7, 2021/by Mad Hedge Fund Trader

A Rare Blue-Chip Stock in Deep Value Territory

Biotech Letter

Merck (MRK) is facing a huge problem. In roughly seven years, its top-selling megablockbuster cancer treatment Keytruda is set to lose its patent exclusivity.

This is a major concern for the company, considering that Keytruda comprised over a third of the their revenue in 2020.

This impending “doom” appears to have scared off investors, as Merck stock has been trading at at least 12 times the earnings expected within the next 12 months.

However, it looks like Merck is slowly gearing up to reveal the solutions it came up with to address this major problem.

The first sign of a turnaround is Merck’s recent news about releasing an oral antiviral pill for COVID-19.

Immediately after the release of the positive data, the biopharmaceutical giant’s $206 billion market capitalization climbed by $16 billion, showing off an 8.4% in its share price.

In comparison, other COVID-19 vaccine stocks experienced significant selloffs. Novavax (NVAX) fell by 12%, while Moderna (MRNA) slipped by 11%.

Merck’s COVID-19 pill, called Molnupiravir, is expected to be a cheaper, safer, and more effective alternative to the current antiviral treatment available today, which is Remdesivir from Gilead Sciences (GILD).

Molnupiravir has been so promising that the US government already sealed a $1.2 billion contract with Merck to get 1.7 million doses of the drug months before the announcement.

While there’s still no final word on the pricing, the US government’s deal places the drug at $700 per dose.

Given its manufacturing capacity, Merck disclosed that it could easily produce six times that order, with the company targeting roughly 10 million courses by the end of 2021.

Using these numbers, it’s easy to see how Merck can generate $7 billion in sales of Molnupiravir alone this fourth quarter.

Although Molnupiravir’s sales won’t be a game-changer for Merck in the same way Moderna’s COVID-19 vaccine candidate changed its landscape, the $7 billion revenue would still offer a significant boost.

Another 10 million doses of Molnupiravir are slated for release by 2022, indicating higher sales for Merck in the coming months.

Aside from working as an antiviral pill, Molnupiravir is also believed to be effective against other known viruses like influenza.

Considering the surging demand for travel these days, there’s a huge possibility that Merck’s oral drug will be handed out like candy canes as a potential preventive measure.

After all, the efficacy of the COVID-19 vaccines, especially for those who got jabbed earlier than most, would start to wane at this point.

Taking into account the demand for this pill worldwide, it’s realistic to assume that Molnupiravir can generate $35 billion to $70 billion in revenue for Merck.

Even before the news about Molnupiravir broke, Merck already raised its revenue guidance for 2021 to somewhere between $46.4 billion to $47.4 billion, signaling 12% to 14% growth.

Aside from its COVID-19 drug, Merck has been busy expanding its portfolio that already covers oncology, hepatitis, and HPV.

One of its latest moves to achieve this goal is its $10.8 billion acquisition of Acceleron Pharma (XLRN)—a deal Merck snagged right under the nose of the strongest contender in the race, Bristol-Myers Squibb (BMY).

Merck’s acquisition of Acceleron will boost the cardiovascular pipeline of the company, including treatments for life-threatening blood vessel conditions.

These are on top of its growing vaccine business, which still has four queued for Phase 2 clinical trials and another for regulatory review.

These candidates effectively make Merck a critical player in the rapidly expanding vaccine market—a segment that’s projected to rise from $42 billion in 2020 to $74 billion by 2028.

Overall, Merck is one of the unparalleled blue-chip stocks trading in deep-value territory these days.

It’s hitting all cylinders, showing off a stable expansion of its key franchises and an impressive balance sheet to fund its R&D plans.

Merck has become the poster child of a remarkable stock valued at a reasonable price.

merck stock

October 7, 2021/by Mad Hedge Fund Trader

September 30, 2021

Biotech Letter

Mad Hedge Biotech & Healthcare Letter
September 30, 2021
Fiat Lux

FEATURED TRADE:

(THE BIRTH OF A TRUE INNOVATOR IN BIOTECH)
(NVAX), (MRNA), (BNTX), (PFE), (JNJ), (AZN)

September 30, 2021/by Mad Hedge Fund Trader

The Birth of a True Innovator in Biotech

Biotech Letter

Innovation and establishing groundbreaking frontiers are never straightforward. This high-risk, high-reward endeavor is littered with skeletons of failure along the way.

The situation is particularly prevalent in the biotechnology and healthcare sector. However, there are a handful of companies that manage to navigate the risks.

Novavax (NVAX) is one of them.

While the chance to become one of the early investors to buy Novavax at $5 has passed, I think the stock is still a good opportunity.

Right now, we’re at the foothills of its mid-phase potential—a few steps away from its high-growth stage.

At this point, what was previously assumed as a high-risk investment in Novavax can already be perceived as a calculated risk, and the reward can now be seen from a distance.

Simply put, there’s still a chance to invest in Novavax because its story is still being written.

So far, Moderna (MRNA) has a market capitalization of $183.50 billion, while BioNTech (BNTX) has $85.61 billion. In comparison, Novavax comes in positively cheap at $19.16 billion.

The key difference is that Moderna and BioNTech already have their COVID-19 vaccines out in the market.

As for Novavax, the biotech’s candidate, NVX-CoV2373, is still waiting for the green light for its first Emergency Use Authorization.

When government agencies begin letting Novavax distribute its COVID-19 vaccine, though, the stock is projected to soar.

The approval for NVX-CoV2373 is almost inevitable, as the vaccine showed an impressive 96.4% efficacy against the original strain—a higher percentage than Pfizer (PFE) and Moderna’s candidates.

If all goes well, the vaccine could be available by the fourth quarter.

As golfers would say, it’s only a chip and a putt from this point to get Novavax’s COVID-19 vaccine out in the market.

Given this projection, Novavax is expected to be the No. 3 COVID-19 vaccine distributor globally, easing out competitors Johnson & Johnson (JNJ) and AstraZeneca (AZN).

Despite not being a first mover in the COVID-19 vaccine race, Novavax can still seize a considerable market share.

The majority of the global population has yet to be vaccinated, and the company has already secured a deal for 2 billion doses in 2022.

On top of that, biotech has several agreements, including 100 million doses for the United States, 200 million doses for Europe, 150 million doses for Japan, and more than 1 billion doses for some developing countries.

In fact, the United States paid an advance of $1.3 billion for 100 million doses. That puts NVX-CoV2373 at roughly $13 per dose.

Although the purchase agreements are confidential, the prices for Japan and Europe are likely to be higher, while the developing countries will be given discounted rates.

At this rate, it’s possible that Novavax’s revenue in 2022 will be higher than its current market capitalization.

However, Novavax’s prospective path to becoming a high-reward investment will most probably come on the coattails of its COVID-19 vaccine, NVX-CoV2373.

Despite getting overtaken by Pfizer and Moderna in the COVID-19 vaccine race, there’s a critical area where Novavax has a massive headstart from its larger rivals: the COVID-19/influenza vaccine combo.

Not only does Novavax have several candidates well on their way to clinical trials, but the company’s combo vaccines also have the potential to outperform the majority—if not all—of its competitors aiming to market similar products.

So far, Novavax’s flu candidate NanoFlu appears to be a frontrunner as it meets all the primary endpoints set for Phase 3 clinical testing.

If everything falls into place, then Novavax would be able to bring a COVID-19/flu vaccine to market by 2025.

While three to four years may seem like a long time, keep in mind that neither Moderna nor Pfizer has a timeline for any potential product in this segment.

Although we don’t exactly know the future pricing for these combo vaccines, we can use the COVID-19 vaccine earnings of Pfizer and Moderna as guides.

Pfizer and BioNTech anticipate roughly $33 billion in revenue, while Moderna estimates more than $20 billion. Combined, that’s over $50 billion.

It’s evident that a combo vaccine would signify a multi-billion-dollar market, and obviously, more than one player would be taking a crack at it.

Nonetheless, the first to market could end up with the largest share—a fact that Pfizer turned into reality with its weeklong headstart over Moderna in the COVID-19 vaccine race.

While Novavax failed to keep up in this race, the company appears to be ready to seize its second chance to lead the way in the COVID-19/influenza combo vaccine race instead. Needless to say, this potentially blockbuster product could become an absolute game-changer.

novavax vaccine

September 30, 2021/by Mad Hedge Fund Trader

July 27, 2021

Biotech Letter

Mad Hedge Biotech & Healthcare Letter
July 27, 2021
Fiat Lux

FEATURED TRADE:

(A RESURGENCE STOCK READY FOR THE NEXT WAVE)
(MRNA), (PFE), (BNTX), (JNJ), (NVAX)

July 27, 2021/by Mad Hedge Fund Trader

A Resurgence Stock Ready for the Next Wave

Biotech Letter

What truly scares investors isn’t really the potential relapse of the financial metrics that would undoubtedly take center stage again since the earnings season already commenced.

As we have been recently reminded, the world’s worst nightmares still place the COVID-19 virus front and center—this, despite the pandemic supposedly already under control.

COVID cases are starting to rise again, and the delta variant is seen as the latest addition to the problem.

That strain has actually become dominant in the United States, sending unvaccinated individuals to hospitals faster than its predecessor.

This delta variant is said to be more contagious than the previous virus. In fact, the fear over this new wave is incredibly high that the US government decided to issue a “Do Not Travel” advisory for the UK, which has been suffering from outbreaks despite their high vaccination rates.

If this is yet another indication of another disastrous year like 2020, then stocks would most certainly fall.

However, stocks managed to bounce back after the initial scare.

While this sparked a debate on the reason behind the recent sharp losses, investors are encouraged to remain focused on how the virus can still affect their lives despite the strong temptation to believe that the stock market will continue to rise from here.

Vigilance is the key to survival these days. It’s critical to bear in mind that the virus that upended our world and forced us to shutter our economies may not be in retreat just yet.

After all, even paranoids have enemies.

That’s what makes the mRNA vaccines a promising answer to this new issue.

Moreover, against this volatile environment, one stock looks to be extremely intriguing: Moderna (MRNA).

Amid the analyses and reports, the most consistent thing about Moderna—and the most notable quality it has—is its solid science.

At its core, mRNA technology can transform the cells in a person’s body into mini-factories with the ability to produce virtually any kind of protein that Moderna wants.

So when people get inoculated with mRNA-1273, the mRNA instructs the body’s cells to start producing inactive replicas of COVID-19 proteins.

Then, the body’s immune system responds to those replicas.

This process effectively teaches the person’s immune system how to protect itself and fight off any type of exposure to the COVID-19 virus proteins.

Moderna’s vaccine is based on mRNA technology, which is primarily an information molecule. This means that this could be used to create various products, which would reach better technical success over time.

Basically, one major benefit of mRNA is that the chemistry behind the formulation for treatments like the flu shot uses exactly the same when creating more advanced products like the COVID-19 vaccine or even the HIV vaccine.

This makes it easier for Moderna to keep developing vaccines and other treatments because the company no longer needs to implement major changes in its manufacturing system for every new drug.

This is incredible leverage for Moderna, particularly across its manufacturing infrastructure and R&D. With the money saved on this advantage, Moderna can make massive investments in other segments like IT and marketing.

In fact, their quickness to market their vaccine is one of the reasons for Moderna’s success in the COVID-19 vaccine race.

Over the course of the last 52 weeks, Moderna stock has performed within the range of $54.21 to $342.51. The stock also managed to sustain its momentum from the surge of investor interest last year and is up by 207% so far this 2021.

In ensuring that it doesn’t get too far behind the leader, Pfizer (PFE)-BioNTech (BNTX), it secured a huge chunk of the market share as well.

Now, there’s a new virus strain threatening to take down everything we’ve worked hard to rebuild since the first COVID-19 case broke last year. This could mean an additional revenue stream for Moderna considering that it can deliver at lightning speed compared to other developers.

Aside from its work on COVID-19, Moderna is also looking for ways to use mRNA technology to develop treatments for heart failure, cancer, and other severe conditions.

To date, Moderna has roughly 24 mRNA-based programs in its pipeline, ranging from the Zika vaccine to cancer treatments.

Admittedly, buying Moderna stock presents risks. However, the greed and fear that continue to rule the markets places Moderna in a unique position to be the answer to all the questions.

Moderna is estimated to rake in $18.8 billion in revenue for 2021, thanks largely to its COVID-19 vaccine, with the number expected to rise as the company ramps up production to reach 3 billion doses in 2022.

Moderna’s dominance today doesn’t necessarily mean it’ll last forever, especially with competition coming in from Johnson & Johnson (JNJ) and Novavax (NVAX).

However, the technology it uses and the fact that it’s one of the only two biotechnology companies that successfully executed the mRNA place Moderna in an extremely unique, profitable, and secure position for the foreseeable future.

moderna stock

July 27, 2021/by Mad Hedge Fund Trader

June 10, 2021

Biotech Letter

Mad Hedge Biotech & Healthcare Letter
June 10, 2021
Fiat Lux

FEATURED TRADE:

(IN THE RIGHT PLACE AT THE RIGHT TIME)
(MRNA), (PFE), (BNTX), (NVAX), (CVAC), (SNY), (TMO), (CTLT), (BAX), (INO)

June 10, 2021/by Mad Hedge Fund Trader

In the Right Place at the Right Time

Biotech Letter

Before the COVID-19 pandemic, only a handful of people had actually heard of messenger RNA (mRNA).

Now, this technology has become a household term thanks to the success of the COVID-19 vaccine programs of Pfizer (PFE), BioNTech (BNTX), and Moderna (MRNA).

Aside from these three names, other players in the mRNA arena include Novavax (NVAX) and an under-the-radar stock called CureVac (CVAC), which has been collaborating with Bayer (BAYRY).

Even Sanofi joined the list recently with its acquisition of mRNA-focused biotechnology company Tidal Therapeutics.

Amid the growing number of mRNA-focused companies, however, the world has come to associate the technology most with Moderna.

This is apparent in the increasing demand for Moderna’s COVID-19 vaccine, which has been pushing the biotech company to quickly expand its manufacturing capacity.

One of the steps it took to meet the supply expectations is to partner with Thermo Fisher (TMO), specifically for fill-finish, labeling, and packaging.

For orders outside the United States, Moderna established a partnership with South Korea’s renowned Samsung Biologics (KRX: 207940) to keep up with the demand.

While TMO and Samsung Biologics are the two major forces helping Moderna in its manufacturing concerns, other companies are also pitching in, including Catalent (CTLT), Sanofi, and Baxter BioPharma Solutions (BAX).

With the assistance of these companies, along with the major expansion of its own manufacturing site, Moderna anticipates that it can supply at least 3 billion doses of its COVID-19 vaccine annually by 2022.

This is promising news, particularly in light of another massive market that Moderna can conquer next: India.

While the United States has managed to turn the corner in the COVID-19 battle, India has been struggling to fight back against the virus. To this day, the country continues to grapple with the increasing number of COVID-19 cases.

Low and sluggish vaccination rates are considered the major contributing factor to this problem, with a measly 3.3% of India’s citizens getting fully vaccinated so far.

With a population of approximately 1.39 billion, this offers a massive opportunity for vaccine developers.

Thus far, only 228 million doses of the COVID-19 vaccines have been shipped to India. That leaves about 1.16 billion people in this huge country to receive a vaccine.

Since India is a developing nation, vaccine makers are expected to charge the low end of their range.

For Moderna, that would be roughly $25 per dose, while Pfizer would probably charge $19.50 per dose.

However, these prices could still go lower depending on the contract negotiated by the Indian government.

Even at the low end of the price point though, the Indian market represents approximately $28 billion in revenue for COVID-19 vaccine developers.

Taking advantage of this momentum, Moderna has been working on booster candidates for its COVID-19 vaccine. In fact, one candidate may be ready by fall.

Of course, competitors are looking into the new variants as well. Aside from Pfizer, smaller companies like Inovio Pharmaceuticals (INO) have started with clinical trials this year.

Moderna is also investing heavily in artificial intelligence (AI) in an effort to become a step ahead of future diseases.

Through AI and machine learning, Moderna aims to predict strains that evade protection provided by their roster of vaccines.

Based on the data, the company will be able to develop next-generation vaccines and boosters before the situation becomes as critical as what happened in 2020.

These efforts are essential for Moderna to sustain its position as the leader in mRNA technology.

Despite its earlier issues with production, Moderna is still set to generate roughly $19.2 billion in revenue for its COVID-19 vaccine thanks to advance purchase agreements.

The potential availability of a booster this year would definitely get the ball rolling in terms of handling newer variants.

The biotechnology industry is favored among investors on the lookout for companies with incredibly strong growth potential.

While it’s a risky environment filled with businesses flaming out practically year after year, winners in this field can come out with extremely impressive results.

In recent months, Moderna has become one of the most successful examples that demonstrated the potential of a biotech when it finds itself with cutting-edge technology at an ideal time.

moderna