For many countries across the globe, it is believed that the long-expected second wave of COVID-19 has arrived. With case numbers increasing and the number of deaths once again rising, the race is on for pharmaceutical companies around the world to bring a tried and tested vaccine to market to prevent as much further damage from the pandemic as possible.
Senior health officials in the UK have suggested that a vaccine could be available as early as spring 2021, with results from clinical trials by the end of this year. A number of the companies currently conducting Phase 1-3 trials are publicly listed, and some, such as Moderna and Vaxart Inc. – have seen jumps in share prices.
Some investors may be considering investing in these companies in light of their share price spikes – but can the winners in the race to a successful vaccine really be predicted?
The companies to watch
Various sources have listed pharmaceutical companies that investors should watch – like these. These lists are generally based on which companies are furthest ahead in their clinical trials – and so, to some, may seem like a reliable way of establishing which investments are most likely to bear fruit. However, even a successful Phase 3 trial does not necessarily mean that a vaccine will be approved: after this, it must still go through expert review and licensing.
A world of uncertainty
Sources claim that over $100bn of investors’ money is riding on the approval of a COVID-19 vaccine, suggesting that the stock market is placing a great deal of value on those vaccines that are currently in development. However, Hargreaves Lansdown describes picking a winner as “the race you’ll struggle to win”. They state that even expert virologists cannot predict which company will come out on top: with high costs, a high likelihood of failure, and the fact that some of these companies will be making little to no profit, they believe that investing in a company simply because you believe it is likely to find a COVID-19 vaccine is a bad idea.
Thinking long term
Instead, Hargreaves Lansdown encourages people to think long term – using the principles of top investor Warren Buffett and deciding whether a pharmaceutical stock you plan to invest in now would be one that you would be happy to invest in long term.
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