The massive worldwide horse race featuring multiple pharmaceutical companies working to pursue a vaccine for COVID-19 is rapidly coming to a conclusion, with one company actually already crossing the finish line and several others closing in close behind it. With that in mind, let's take a look at the biggest news coming out of three of the current front-runners, and figure out who on the list is actually worth putting investment behind.
Pfizer Already Won Six Days Ago
In a move oddly reminiscent of the film “Watchmen,” where the main villain declares that he may have been engaged in monologue, but he'd already done what he said he would do 35 minutes prior to the speech, Pfizer (NYSE:PFE) has already put its vaccine into the field. At least one truckload left the Kalamazoo, Michigan plant back on Sunday night, with further plans to release more over the next several weeks.
Reports suggest what we've been thinking would happen all along is happening, though, and the company is beginning to have difficulty finding the necessary raw materials to mix further doses. It's already sent word to the White House to try and get some of that material sent their way—which the President should be able to accomplish with the still-in-place Defense Production Act—to help augment its delivery capacity.
Our latest research puts Pfizer at a “hold” consensus, oddly enough, and one that's declined in recent days. Pfizer currently holds 10 “hold” ratings and four “buy” ratings, down from last month's eight “hold” and five “buy”. The price target has been in recovery since a drop earlier this year took it from $40.30 six months ago to $39.57 three months ago, followed by recovery to $40.07 today.
Moderna Makes a Push for the Finish Line
Meanwhile, Moderna (NASDAQ:MRNA)—who looks like it's in a great position to take second, as far as US development goes, anyway—recently revealed it's landed a positive report from the Food and Drug Administration. Such a measure opens up the possibility that the company can land emergency use authorization—some reports suggest that such an authorization could be in hand by the end of the day today—and be out in the market fairly soon.
Moderna's analyst perception right now isn't much better than Pfizer's, based on our latest research. The company currently holds a consensus rating of “hold”, and a consensus that's been steadily declining for the last six months. Back then, it had one “hold” and 11 “buy” ratings to its credit. Now, it features two “sell” ratings, seven “hold” and 10 “buy”, for a consensus of “hold”, the first time in six months that that's happened. The price target, however, has been spiking in recent days, going from $82.50 six months ago to $93.88 a month ago, and finishing up today at $120.89.
Johnson & Johnson Gets Its Act Together
Finally, we have Johnson & Johnson (NYSE:JNJ), one of the world leaders in anything healthcare-related. From basic hygiene products to powerful vaccines, the company has been pushing toward a vaccine for some time now, and one that, on the surface, is a much better candidate than many others. Requiring little unusual storage and care—it can be stored at normal refrigeration rather than the dry-ice coldness of Pfizer's—and only needing one dose, it could be a winner if it hits the market. Right now, though, it's in late-stage trials, with its latest candidate set to launch a 45,000-participant trial soon. Data is expected by late January.
Analysts, meanwhile, support this company more than the others. It's currently enjoying a “buy” consensus, our latest research reveals, and has maintained that consensus for the last six months. The company currently has three “hold” ratings and 10 “buy”, which is exactly what it had last month. The price target, meanwhile, has stayed comparatively static as well, going from $163.86 six months ago to $166.69 today.
But Who's Worth Backing?
Out of the three major candidates in the COVID-19 vaccine hunt, Johnson & Johnson looks like the winner, and it hasn't even fielded a successful candidate yet. First, it enjoys better analyst perception than either Moderna or Pfizer. Second, it has a much broader product base; while certainly, Moderna and Pfizer have other products on hand—and successfully fighting the coronavirus will certainly lend at least some halo effect to the others in the field—Johnson & Johnson is seen everywhere from shampoos to soaps to, again, high-end medical developments.
It's also important to note what's happening at Pfizer. The company is already starting to run into key raw materials shortages, which means rollouts of the vaccine will be slow at best. Even with other companies entering the field, the demand for vaccine will likely be sufficiently brisk—if not total; there's certainly an undercurrent of concern about the efficacy and long-term effects of all these rapidly-developed candidates—that everyone will have a slice of the market.
Amazingly, the first-place finisher in this particular race likely won't enjoy first-mover advantage for long, and it's just as clear it doesn't have the material to make much of that early edge either. So for a real winner in this race, look to the company for whom this is just one more segment it's operating in.
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