The Complicated World of Biotech Investments in the Era of COVID-19

VANCOUVER, British Columbia - May 23, 2020 - PRLog -- Investors are excited about biotechnology stocks in the time of the novel coronavirus.  The Wall Street Journal reports that small and medium biotech stocks are near record highs, with a 60% resurgence in value since March.

Indeed, the time is ripe for biotech companies to cash in on COVID-19 via pursuit of novel drug therapies and vaccines for the condition, which currently has no cure.  But risky biotech companies are taking advantage of the COVID-19 market in an effort to gain more investors for pharma products which may ultimately fail.

Sources of Risk in Biotech and Pharma

The biotech industry is notorious for its high risk, so in a COVID-19 world, more than ever, investors need to look for long-term value from prospective biotech investments.  Sources of risk in the biotechnology and pharma industry – even before the current environment – include:

  • Companies' acquisition by other companies
    Biotech is a fast-paced and dynamic world, and companies may join forces to work on a shared goal.  GlaxoSmithKline has acquired 21 companies over the past decade alone, according to Crunchbase. In an alternative scenario, two companies may race towards a cure, with one company inevitably losing out.

  • Drugs failing in clinical trials after seeming promising in the preclinical world
    While it may take ten years just for a drug to enter the clinical trials process from the laboratory, this protracted timeframe may not spell success.  In 2019, Merck's cancer immunotherapy Keytruda, one of the company's strongest drugs, failed in Phase 3 clinical trials for treatment of a specific type of liver cancer.  Also in 2019, Bristol Myers Squibb's Obdivo failed in a Phase 3 brain cancer trial.

  • Adverse effects which cause drugs to promptly be pulled off the market
    In 2004, Merck recalled another blockbuster drug, the painkiller Vioxx, after patients began suffering heart attacks and strokes.
Investors Should Seek to Minimize Risk in Biotech by Avoiding COVID-19 Hype

A key aspect of investing in biotech has always been to minimize the inherent risk as much as possible.  This means looking at the company's foundation and whether they are an established leader in the field.  Instead of examining how companies are faring in the COVID-19 world, consider tried-and-true leaders in pharma and biotech, which are likely to play a major effort in COVID-19 due to their leadership in the space.

Opting for low-risk stocks which performed well before the economic downturn associated with the ongoing pandemic can help improve the success of your portfolio in the long term.  These companies include:
  • Johnson and Johnson (JNJ), a company with $82.8 billion in sales, which recently announced work on a COVID-19 vaccine and is listed at #34 in Forbes Global 2000 2020.

  • Abbott Labs (ABT), which recently unveiled 5-minute point-of-care testing for the novel coronavirus which can be used at pharmacies and doctor's offices.  Upon this news, the stock price rose nearly 50% from its low price of approximately $69 during the lowest point of the economic downturn to about $90 per share.

  • Gilead Sciences (GLD), a company listed at #186 in the Forbes Global 2000 2020, which recently experienced new popularity as its antiviral treatment, Remdesivir, obtained fast-track FDA approval as a treatment for COVID-19.

  • Pharma giant AstraZeneca (AZN) recently announced a landmark agreement with Oxford University towards making a COVID-19 vaccine a reality for millions around the world.
Other low-risk choices include Pfizer (PFE), GlaxoSmithKine (GSK), and Novartis (NVS).  These biotech and pharma companies have weathered many storms, and, regardless of their contributions to COVID-19, will likely continue to thrive due to their successes elsewhere in the industry.

The Bottom Line

Biotech investors should focus on long-term investing strategies with proven, big pharma companies.  They should avoid small, undercapitalized biotech companies that are simply chasing trends.

Click to Contact
Latest News

Europe's specialty food makers brace for US tariffs

Jun 5, 2020

MILAN — European producers of premium specialty agricultural products like French wine, Italian Parmesan and Spanish olives are facing a U.S. tariff hike due Friday with a mix of trepidation and indignation at being dragged into a trade war they feel they have little to do with. The tariffs on $7.5 billion on a range of European goods were approved by the World Trade Organization as compensation for illegal EU subsidies to plane maker Airbus. The U.S. has some leeway in deciding what goods it puts tariffs on. So while it is taxing European aircraft goods an extra 10%, it...

Sophia Loren, Valentino receive standing ovation in Milan

Jun 5, 2020

MILAN — Sophia Loren and Valentino received a standing ovation from a packed house of fashion and Hollywood A-listers during the third edition of the Green Carpet Awards honoring progress toward sustainability. Loren, stunning in a black gown and glistening diamond necklace, presented Valentino with an award for legacy achievement at Milan's famed La Scala Opera house. Loren said the 87-year-old designer was "a friend, a master, a legend, a man who revolutionized the world of fashion through his elegance, passion and style." The award capped an evening to mark progress in creating more ecological and social consciousness in the...

Gucci takes a kinky turn; Dolce&Gabbana give a jungle roar

Jun 5, 2020

MILAN — Fashion, according to Gucci creative director Alessandro Michele, now is above all "a great platform. It has great power." Michele has used that platform during his 4½ years at Gucci's helm to give gender fluidity a voice. The fashion house also put sustainability on stage, saying it would spend millions on a program to become carbon neutral. Fashion is recognized as one of the world's top pollution-producing industries, and luxury producers are taking additional steps to address the environmental impact of making clothes. The Italian Fashion Chamber, along with Livia Firth's EcoAge consultancy, was presenting its third Green...

Armani explores connection with nature in ethereal looks

Jun 5, 2020

MILAN — Milan designers are presenting fashion as essential. That no longer refers to must-haves, but to a distillation of ideas, discarding excess in collections and by example in wardrobes, to discourage waste. Giorgio Armani's collection presented on Saturday, the fourth day of Milan Fashion Week, was both earthy and ethereal, with myriad natural references the designer said were meant to create closeness with Mother Earth. Angela Missoni left each guest a solar lamp with a note, "Join us in holding hands with the sun, we are at a crucial point for our planet and we need to take action."...

Milan Fashion: J-Lo struts updated jungle dress at Versace

Jun 5, 2020

MILAN — Jennifer Lopez won Milan Fashion Week on Friday, wowing the crowd at Versace when she emerged wearing a version of the jungle dress that nearly broke the internet almost 20 years ago. Building up to the big reveal, Donatella Versace announced from backstage a Google search for "Versace jungle dress," and a dome ceiling above the circular runway filled with images of J-Lo wearing the 2000 Versace dress at the Grammys. Then Versace intoned: "The REAL jungle dress," and Lopez appeared in an updated version of the iconic gown, which maintained the plunging neckline but in a sleeveless...

Sign up now!

The Healthier Web delivers accurate and up-to-date health information through medical content and insights from experts. Feel the ‘ohm’ here in The Healthier Web.

Contact us: sales[at]thehealthierweb.com