Vaccine stocks to watch as the race heats up

Any company that can develop a successful treatment, scale it up and commercialise it will soar in value.

Trader 1

Its hardly surprising that healthcare sector, which includes pharmaceuticals has been outperforming the broader market.  These are the stocks which could produce a vaccine for covid-19 saving thousands maybe even millions of lives, whilst securing the quickest path back to pre-coronavirus normality.

The pharmaceuticals sector has fully recovered from its initial coronavirus sell off and is driving higher as scientists work around the clock to understand covid-19 and develop a vaccine or treatment. 

There are no guarantees that a vaccine will be found and clinical trial for drugs can have a high failure rate. However, the progress made by some companies has been impressive in such a short period of time.

Needless to say, that any company that can develop a successful treatment, scale it up and commercialise it will soar in value. The White House has just selected 5 coronavirus vaccine candidates as the most likely to produce a vaccine. These are AstraZeneca, Pfizer Inc, Moderna and Johnson and Johnson and Merck & Co. These stoks are worth watching closely.

Here we take a look at some candidates that made the list and some that didn't but are still considered front runners:

AstraZeneca has outperformed the broader market by a wide margin as it works to develop treatments for covid-19. AstraZeneca has announced that it is ready to provide a potential new coronavirus vaccine, which it is developing with Oxford University from September. Initial trials are underway, although the firm acknowledged that the vaccine might not work. 

The firm has received over $1 billion from US Biomedical Advanced Research and Development Authority for the development, production and delivery of a vaccine. 

Phase I/II trials have already started in Brazil where the rate of infection is still high enough for participants to catch the virus.

Q1 results on 29th April revealed 17% increase in revenue for the quarter. EPS +21%.
Q2 release expected 30th July

Levels to watch:
Share price rallied hard across April and May reaching an all-time high of 9332p before trending lower. It trades above its 100sma, which also offers support at 8515p. However, it has slipped below its 50 sma at 8745p. Watch for a break-out above or below these levels.


Gilead is a US biotechnology firm that has been at the forefront of coronavirus vaccine development. Early on, in February, Gilead announced that it would be starting Phase 3 clinical trials for its drug Remesdivir. Trials have been going on in China, Asia and the US, with 4000 patients to be included, up from the original 1000 planned. The drug has already been approved as emergency treatment for coronavirus in several countries. 

Whilst the latest investigations show that Remdesivir helps coronavirus patients with moderate pneumonia to recover faster, this is still a long way from being “the covid-beater”

Levels to watch:

The share price rallied across April & May, however the realisation that this is not “the” killer drug has seen the share price fall below its ascending trendline. The trend near term trend is bearish and support can be seen around 72.50. 

Eli Lilly
American pharmaceutical company Eli Lily has seen its share price soar as the race for a coronavirus vaccine heats up. On Monday, this week Eli Lilly said that it had started an early stage human trial to test its potential treatment for covid 19. Eli Lilly teamed up with biotech firm AbCellera in March to co-develop the antibody test. Results are anticipated at the end of this month.

More recently Eli Lilly announced hat it would be teaming up with the National Institute of Allergy and Infectious disease to test the effects of its Olumiant drug on patients that have been hospitalised. Results are due mid-June. 

Q1 results released 23rd April were solid with revenue +15% to $5.9 billion topping expectations of $5.5 billion.
Q2 results due 30th July 

Levels to watch
As with the previous two, Eli Lilly’s shares rallied across April & May, and that rallied has run out of steam in recent weks as investors await fresh news and trial results. 
The stocks trades above its 100 sma, which offers support at 150.5, whilst trading below its 50 sma which brings resistance at 154.00. Watch for a break out above or below these levels. 

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