The United States entered into an agreement with Moderna, Inc. MRNA on Aug 11 to acquire 100 million doses of its potential COVID-19 vaccine. President Donald Trump’s administration has been making aggressive investments in biotech companies to secure the first doses of a vaccine once it is developed.
The deal with Moderna yet again renewed hopes among millions about a possible vaccine by the end of this year. The announcement sent shares of biotech companies and drugmakers working on a COVID-19 vaccine rallying.
Trump Administration Secures Moderna’s Vaccine
The United States entered into an agreement with Moderna to acquire 100 million doses of its potential COVID-19 vaccine for around $1.5 billion. Following this, shares of the company went on a rally on Wednesday. At one point of time, the company's shares had soared more than 5%. However, it ended the day 0.8% higher. Moderna's price per dose comes to around $30.50 per person for a two-dose regimen.
Moderna's vaccine candidate, mRNA-1273, is one of the first to have entered the final stage of trial and is on track to be completed by September, the company had said last month. The United States in recent weeks signed deals to acquire hundreds of millions of doses of potential COVID-19 vaccines from a large number of companies as part of its Operation Warp Speed program, which aims to deliver a vaccine in the country by the end of the year.
However, the deal would pay out in full if the vaccine achieves certain regulatory milestones before Jan 31, 2021. This once again hints at the Trump administration’s confidence in achieving a vaccine to wipe out the deadly virus by the end of this year. News of the deal sent shares of other drugmakers on a rally.
Shares of Sanofi SNY, Adaptive Biotechnologies Corporation ADPT, and Amgen, Inc. AMGN increased 1.9%, 4.3% and 2.3%, respectively. Pfizer, Inc. PFE and GlaxoSmithKline plc’s GSK shared gained 1.4% and 2.1%, respectively, while Gilead Sciences’ GILD shares increased 1.1%. Each of the above companies has a Zack Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Vaccine Hopes Rise Again
Moderna isn’t the only company that the United States has entered into a deal to secure millions of doses of a possible coronavirus vaccine. The United States has advanced purchase agreements with Johnson & Johnson JNJ, AstraZeneca, Pfizer and BioNTech SE BNTX, and Sanofi and GlaxoSmithKline for their respective vaccine candidates.
Last week, Trump said that a vaccine would be ready "sooner than the end of the year. Could be much sooner." He also said that there are a lot of vaccines under study and he is confident that the United States will do “good on vaccines and therapeutics also."
Naturally, with drugmakers and biotech companies making remarkable progress in developing a vaccine over the past few months, hopes continue to rise. Some of the companies that have made remarkable progress so far are leading the race.
Moderna particularlyhas been in the spotlight over the past few months. The company’s vaccine candidate mRNA-1273 is a molecule that genetically encodes a set of instructions based on which cells make proteins and send them to various parts of the body.
The company’s expected earnings growth rate for the current year is 1.9%. Its shares have gained 14.1% in the past 30 days.
Pfizerjoined forces with German biotech giant BioNTech to develop a vaccine for coronavirus. The company has now entered into its phase 2/3 safety and efficacy clinical study on 30,000 subjects. The candidate so far has shown promise and the U.S. government has also placed an initial order of 100 million doses for $1.95 billion to secure 500 million additional doses.
Pfizer’s shares have advanced 14.9% in the past month. The Zacks Consensus Estimate for current-year earnings has improved 1.4% over the past 60 days.
Gilead Sciences, Inc. in May received an emergency-use authorization from the FDA based on preliminary results from two clinical trials: one conducted by the NIAID and the other by Gilead.
The company’s expected earnings growth rate for the current year is 3%. The Zacks Consensus Estimate for current-year earnings has improved 6.7% over the past 60 days. Shares of the company have gained 6.7% year to date.
Amgen, Inc., one of the biggest biotech companies in the world, collaborated with Adaptive, Inc. in April to work on antibodies that can be used to prevent or treat COVID-19. Amgen also plans to test Otezla as a COVID-19 therapy treating respiratory distress in late-stage patients in the coming days.
Amgen’s expected earnings growth rate for the current year is 5.5%. The Zacks Consensus Estimate for current-year earnings has improved 0.8% over the past 60 days.
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Johnson Johnson (JNJ) : Free Stock Analysis Report
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