Volatility is a big part of biotech stocks. That’s because the biotechnology industry is well known for its speculative nature. Now Russia President Vladimir Putin said the country has developed the world’s first coronavirus vaccine, the ‘epicenter stocks’ are skyrocketing while tech stocks have crattered. Even other promising biotech stocks aiming to combat COVID-19 fell. Shares of Sinopharm (SHTDY Stock Report), AstraZeneca (AZN Stock Report) and Novavax (NVAX Stock Report) all fell during the intraday trading on Tuesday. Here’s the thing, should investors buy these top biotech stocks at a discount? Perhaps you think they are behind Russia’s vaccine. But what if I tell you that the vaccine from Russia hasn’t actually passed phase 3 trials? Will you buy these biotech stocks now?
The U.S. still sees record death rates in Florida. And it is still hard to tame the virus in the country. The result of the vaccine race is not a foregone conclusion. In fact, investors are still pinning all their hopes in vaccine candidates that go through the standard regulatory approvals that people are more familiar with. Only then, people would feel comfortable vaccinating themselves. That’s not to disregard the vaccine from Russia. But vaccine hesitancy is definitely a real thing if there is a failure to convince the general public that a vaccine is safe and effective.
Looking for the best biotechnology stocks to buy involves different metrics of assessment, unlike the rest of the stock market. In many cases, biotech earnings reports aren’t the lightning rod for huge price swings. Instead, these biotech stocks typically tend to ebb and flow on clinical data releases, regulatory approval decisions or government contracts, which are arguably far more important for gauging biotechnology firms’ developments. That said, having a list of top biotech stocks and closely watching their clinical dates and recent development will put investors in a better position to profit.
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Moderna (MRNA Stock Report) is one of the most closely watched biotech stocks in the market. This came after the company was included in the Operation Warp Speed program. And if you have been paying attention to this company, you would also know that the company has reached a deal with the U.S. government for 100 million doses of coronavirus vaccine, which is currently in late-stage human trials and on-track to have results in October.
“We are investing in the development and manufacture of the top six vaccine candidates to ensure rapid delivery. The military is ready to go, they’re ready to deliver a vaccine to Americans as soon as one is fully approved by the FDA and we’re very close to that approval,” Trump said during a press conference at the White House.
Moderna noted that patients in all three dosing tiers of its vaccine candidate, mRNA-1273, produced neutralizing antibodies. For this reason, Moderna might be in the pole position among U.S. companies in the vaccine race. No doubt, there’s a huge market for a COVID-19 vaccine. But it’s unclear if this is a market that can be owned by only a few vaccine developers. As I’ve mentioned previously, this is no longer a winner takes all business. With the U.S. FDA only aiming for modest vaccine efficacy, it wouldn’t be surprising if multiple biotech companies are able to cross that barrier. The way I see it, whichever biotech company which could generate solid data from the clinical trials will benefit. Now that there could be multiple winners, the $27 billion market cap on Moderna seems awfully overvalued.Top Biotech Stocks To Buy Or Sell Now: Sorrento Therapeutics
Shares of Sorrento Therapeutics (SRNE Stock Report) soared more than 1000% since the market crash before consolidation on Tuesday. Sure, there have been plenty of good weeks so far this year. And according to H.C. Wainwright analyst Ram Selvaraju, there’s more upside potential in this stock. The top analyst reiterated a buy rating on SRNE stock and boosted his target price from $24 to $30. That said, his new target price represents a potential 110% increase based on Tuesday’s closing price of $14.09
Back in June, the company also mentioned that it had designed a potential antidote for COVID-19, STI-4398. This is a protein which could inhibit the ability of the novel coronavirus to infect certain cells in the respiratory tract. But there hasn’t been any major update about the potential treatment thus far.
At the end of July, the company said it had licensed a test from Columbia University. The new coronavirus test reportedly detected the COVID-19 in little as 30 minutes using saliva samples rather than unpleasant nasal swabs. The company is marketing the test under the name COVI-TRACE. This news contributed to another rally in Sorrento’s stock price recently. After all, it is not surprising that investors are optimistic about the huge market opportunity for this diagnostic test. The question is, will the rally continue this month?