If you think the pandemic is yesterday’s news, think again. One of the nation’s top doctors recently warned that the US could very soon start seeing as many as a million new Covid-19 cases every day due to the lightspeed spread of the new and recently emerging Omicron variant.
Retiring NIH Director, Dr. Francis Collins, was on NPR’s Sunday show earlier this week to admonish the audience about an excess in complacency. We are all weary of the pandemic, but a million cases a day could have enormous implications for our healthcare system.
“I know people are tired of this,” the doctor said in the NPR interview. “I’m tired of it too, believe me. But the virus is not tired of us. It’s having a great old time changing its shape every couple of months, coming up with new variants and figuring out ways to be even more contagious.”
From an investment point of view, the upshot of this narrative twist is that the first quarter of 2022 may start off with a bang for Covid stocks, especially those with promising new solutions that represent variant-agnostic options.
With that in mind, we take a look below at some of the most interesting stories among stocks with exposure to the Covid-19 vaccine and therapy space.
AstraZeneca PLC ADR (Nasdaq:AZN) bills itself as a holding company involved in research, development, and manufacture of pharmaceutical products. The company’s pipeline focuses on oncology, cardiovascular, renal, metabolism, and respiratory markets.
AZN has been somewhat of a black sheep among the vaccine leadership class for the past year. But the stock has been sharply outperforming most of its cohort over the past month, ripping about 10% in December, while other major players in the space have suffered downside to close out the year.
AstraZeneca PLC ADR (Nasdaq:AZN) recently announced that its EVUSHELD (tixagevimab co-packaged with cilgavimab), a long-acting antibody combination for the prevention of COVID-19, retains neutralization activity against the Omicron SARS-CoV-2 variant (B.1.1.529), according to new authentic ‘live’ virus neutralization data from both University College Oxford, UK and Washington University School of Medicine, St. Louis, US.
Mene Pangalos, Executive Vice President, BioPharmaceuticals R&D, AstraZeneca, said: "Consistent data across three independent studies now provide confidence that EVUSHELD, a combination of two highly potent antibodies, retains neutralizing activity against the Omicron variant at a level that will continue to provide benefit to patients. EVUSHELD is the only antibody therapy authorized for pre-exposure prophylaxis of COVID-19 in the US, and we’re excited that EVUSHELD is now available to help protect vulnerable populations, such as the immunocompromised, who are unable to mount an adequate response to vaccination and who remain at high-risk for COVID-19."
It will be interesting to see if the stock can break out of its recent sideways action. Over the past week, the stock is net flat, and looking for something new to spark things.
AstraZeneca PLC ADR (Nasdaq:AZN) pulled in revenues of $7.2B last quarter to drive top line growth of 37%. In addition, the company is battling some balance sheet hurdles, with cash levels struggling to keep up with current liabilities ($5.3B against $17.5B, respectively).
Oncotelic Therapeutics Inc (OTC US:OTLC) bills itself as an artificial intelligence driven immuno-oncology company with a robust pipeline of first in class TGF-β immunotherapies for late stage cancers such as gliomas, pancreatic cancer and melanoma. The Covid-19 story here is also compelling.
OT-101, the lead immuno-oncology drug candidate of Oncotelic, is a first-in-class anti-TGF-β RNA therapeutic that exhibited single agent activity in relapsed/refractory cancer patients. OT-101 also has shown activity against SARS-CoV-2 and has completed a phase 2 trial against COVID-19, with data cleaning and evaluation and datalock ongoing.
Oncotelic Therapeutics Inc (OTC US:OTLC) most recently announced that it has performed mutational analysis of SARS-CoV-2 and demonstrated that the open reading frames 8 (ORF8) is potentially driving the evolution of the Delta and the Omicron variants. ORF8 protein is abundantly secreted in COVID patients.
Fatality in hospital patients is associated with higher serum levels of ORF8. ORF8 is one of the least well conserved and most variable parts of the SARS-CoV-2 genome.
“It is gratifying to identify what we think is the fundamental evolutionary pathway for SARS-CoV-2,” said Dr. Vuong Trieu, CEO and Chairman of Oncotelic. “The analysis allows us to position our therapeutic and vaccine platform against ORF8 to address this pandemic as it further mutates.”
OTLC shares are up over 60% in the past six weeks, leading the Covid stock space. The stock is also cheap, trading at just $0.16/share, but with upward trending technical dynamics, including its recent breakout above its 50-day moving average.
Oncotelic Therapeutics Inc (OTC US:OTLC) noted in its release that it has identified 30 high entropy amino acid residues which underwent a progressive evolution to arrive at the current dominant variant - Delta variant. The virus underwent mutational waves, with the first wave made up of structural proteins important in its infectivity, and the second wave made up of the ORFs important for its contagion. The most important driver of the second wave is ORF8 mutations at residue 119 and 120. Further mutations of these two residues are creating new lineage trees that are offshoots from the Delta backbone. More importantly the further mutational expansion of the S-protein in the emerging Omicron variant is now followed with the acquisition of ORF8 mutations 119 and 120.
Novavax Inc. (Nasdaq:NVAX) focuses on the discovery, development and commercialization of vaccines to prevent infectious diseases. It provides vaccines for COVID-19, seasonal flu, respiratory syncytial virus, Ebola, and Middle East respiratory syndrome.
The stock has become a johnny-come-lately potential star for speculators in principle if not in fact as the allure of its more simple, easier to store, easier to manufacture, easier to transport, more traditional yet still effective vaccine solution has been widely touted as a potential long-term winner because it translates better to emerging markets around the world, where new variants are thought to be incubating.
Novavax Inc. (Nasdaq:NVAX) recently announced, along with Serum Institute of India Pvt. Ltd. (SII), the world's largest vaccine manufacturer by volume, that the Drugs Controller General of India (DCGI) has granted emergency use authorization (EUA) for Novavax' recombinant nanoparticle protein-based COVID-19 vaccine with Matrix-M™ adjuvant. The vaccine will be manufactured and marketed in India by SII under the brand name Covovax™.
"No one is safe until everyone is safe, and today's authorization marks a vital step for India, where additional vaccine options and millions of doses are needed in the country's ongoing efforts to control the pandemic," said Stanley C. Erck, President and Chief Executive Officer, Novavax. "Novavax and SII will not rest in our partnership to deliver our vaccine to those in India and across the globe, as we work to protect the health of people everywhere."
While this is a clear factor, it has been incorporated into a trading tape characterized by a pretty dominant offer, which hasn't been the type of action NVAX shareholders really want to see. In total, over the past five days, shares of the stock have dropped by roughly -16% on above average trading volume. All in all, not a particularly friendly tape, but one that may ultimately present some new opportunities.
Novavax Inc. (Nasdaq:NVAX) managed to rope in revenues totaling $178.8M in overall sales during the company's most recently reported quarterly financial data -- a figure that represents a rate of top line growth of 13.9%, as compared to year-ago data in comparable terms. In addition, the company has a strong balance sheet, with cash levels exceeding current liabilities ($1.9B against $1.8B).
Other top names in the space include Pfizer Inc. (NYSE:PFE), Moderna Inc. (Nasdaq:MRNA), Merck & Co. Inc. (NYSE:MRK), Johnson & Johnson (NYSE:JNJ), and BioNTech SE ADR (Nasdaq:BNTX).
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