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Coronavirus second wave spells opportunity as well as uncertainty

27 October 2020

After a summer of fun, celebration and relaxation, many of us came away with a renewed sense of appreciation for all of life’s little pleasures that seemed so distant just a few months prior. Spending time with friends and family, walks in the park and restaurant meals took on new-found significance in the post-lockdown era. But as the number of new coronavirus cases soars worldwide and restrictions are reintroduced in various countries, people are beginning to brace themselves for a return to the dark times of spring.

Vaccine race to bring bulls out of hiding

We all remember how devastating social distancing was for the global economy, with the world’s indices losing an average of between 30-40% in a matter of days. However, several sectors managed to buck the trend. Some of the most notable among these were pharmaceuticals and biotech. With the race for a coronavirus vaccine hotting up again just now, we would be wise to expect to see some movement in these segments once more. While there was a lot more uncertainty about which companies would be in the running to get their vaccine to market first back in March and April, the list of potential candidates is now much shorter. That makes it significantly easier to pick which horse(s) to back.

While there are currently 42 vaccines in clinical trials, only 10 of them are in the final stage of testing known as “Phase 3”. The most promising of these are thought to be US biotech firm Moderna’s candidate, a US-German joint effort between BioNTech and Pfizer and a European project headed up by the University of Oxford and AstraZeneca.

Naturally, this has been very good not only for the reputations of the companies involved but for their valuations, too. Luckily for us, all of these organisations (bar the University of Oxford, of course) are publicly traded companies. That means that any progress and success in the COVID vaccine race will most likely translate to a rise in the relevant companies’ share prices.

Only fools rush in

With things as they are, you might be forgiven for thinking otherwise, but there really is more to life — and the pharmaceutical market — than the novel coronavirus. That’s why it’s important not only to look at a given firm’s position in the vaccine race but also at its broader business prospects. Does it have any other promising drugs in the pipeline? How many patents does it currently own? What did its EBITDA look like before 2020? Pfizer, for instance, has close to 30 varied programmes in late-stage testing or awaiting regulatory approval, including a promising pneumococcal vaccine and its chronic pain drug tanezumab. AstraZeneca, on the other hand, is very much all-in on cancer immunotherapy at the moment, with nearly all of its 14 current Phase 3 drugs being designated as oncotherapeutics. The key message here is: Do your due diligence before opening a position.

Trade Big Pharma with Libertex

The good news is, wherever you think the biotech and pharmaceutical markets are going, Libertex can help. Because Libertex offers both long and short positions, you can trade whether your chosen instruments go up or down. What’s more, we offer CFD trading in both of the frontrunners in the vaccine race, Pfizer and Moderna, so you can either pick a side or just as easily hedge your bets by backing both. Create your own Libertex account today if you haven’t already got one and start trading the markets’ hottest instruments on the premier financial platform!



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