Improved Coronavirus Stock: Bayonet or GlaxoSmithKline?


While coronovirus cases are flattening in other developed countries, the US has not been so lucky. As of July 24, the number of coronovirus cases in the US has reached a new record, with more than 78,000 Americans infected. Meanwhile, about 1,485 Americans are dying each day of COVID-19.

However, there is light at the end of the tunnel. Currently, the world’s two largest biotech companies, BioNTech (NASDAQ: BNTX)And GlaxoSmithKline (NYSE: GSK), Are part of the race for a COVID-19 treatment. Let’s take a look at which of the two companies is the better buy.

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Progress from BioNTech here

along with Pfizer (NYSE: PFE), BioNTech is developing an experimental RNA vaccine called BNT162b1 for COVID-19. In its phase 1 clinical trials, 24 out of 24 participants receiving BNT 162B1 developed antibodies that neutralize SARS-COV-2. Furthermore, 95% of patients who have developed vaccines have T-cell responses, meaning immune cells that provide immunity to potentially deadly viruses for many years. The vaccine was also well tolerated, with no serious adverse events reported.

Currently, the vaccine is in phase 2/3 clinical trials. If it was successful, Pfizer and BioNtech will seek approval with the US Food and Drug Administration (FDA) in October. But the demand for its prototype is already wild. On July 22, the US government acquired 100 million doses of BioNtech’s vaccine, with a possible total order of 500 million doses. At $ 19.50 per dose, that could turn into about $ 2 billion to $ 10 billion in revenue for both companies next year. Investors’ expectations for BioNTech are high, with the stock posting a year-over-year return of 147%.

Vaccines aside, BioNTech has a vibrant oncology portfolio, with 11 candidates developing in 12 clinical trials. The farthest of these is near Phase 2 development. With 452 million euros (and an additional 217 million euros in upcoming investments) compared to a net loss of $ 53.4 million euros in Q12020, I think investors should not testify to some top-line results before the company is due There is a possibility. Increase cash again.

Group of doctors talking about corona virus during the conference.

Image Source: Getty Image

GlaxoSmithKline progress here

along with Sanofi (NASDAQ: SNY), GlaxoSmithKline is developing an adjuvant coronavirus vaccine. An adjuvant is a biological additive that can be combined with conventional vaccines to subsequently enhance the antibody and T-cell response capacity. In addition, adjuvants can reduce the amount of organic ingredients required by the vaccine, which will reduce the cost of its manufacture and distribution.

Currently, GlaxoSmithKline is able to manufacture up to 1 billion doses of its adjuvant by 2021 if it passes biological clinical trials. It is currently in Phase I investigation phase, with data expected in the next few months.

While the company’s progress may not be as surprising as BioNTech’s, keep in mind that GlaxoSmithKline is a blue-chip biotech company. Even if its vaccine programs accelerate, investors are still buying an underlying business that is growing its revenue by more than 19% annually as of Q22020. The company received $ 8.4 billion in revenue and $ 0.42 per share in earnings for investors during the quarter. One of the strongest performing segments was Consumer Healthcare, which grew by 25% compared to Q2 2019.

Which is the better coronavirus stock?

Overall, I would argue that BioNotech is the superior coronovirus stock hand-down, as its experimental vaccine has already demonstrated initial efficacy and safety, is on track to be delivered by the end of the year if all goes well, and The orders have been backed by US and UK governments.

While GlaxoSmithKline is a reputable biotech company with a promising candidate, investors should look for fine print before choosing it as a hedge against the COVID-19 epidemic. Management has stated that it does not intend to benefit from its adjuvant vaccines, noting that if the treatment is approved, the company will recoup its vaccine revenue into epidemiological preparations. The announcement did not thrill investors, and GlaxoSmithKline shares are down 14% year-over-year. I think biotech is a better buy for biotech investors.

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