5 best stocks of Canadian companies combating COVID-19

Highlights

• One of the companies listed below is developing a four monoclonal antibody cocktail to treat SARS-CoV-2.
• One of the firms here has reportedly developed a first-of-its-kind AcuVid™ COVID-19 Rapid Antigen Saliva Test
• Among the below companies, the highest ROE stands at 148.79 per cent. 

We have heard of and seen the contribution of some big pharma giants like Pfizer Inc. (NYSE:PFE), AstraZeneca (LON:AZN), etc., in developing and rolling out vaccines for the control and cure of COVID-19 ever since the deadly virus emerged.

There are also some Canadian pharma companies with contributions to curb the spread of the virus. One of these companies has conducted trials of its RALI-Dx™IL-6 Severity test that helps identify patients suffering from an inflammatory response due to COVID-19. Moreover, another company has developed a first-of-its-kind AcuVid™ COVID-19 Rapid Antigen Saliva Test to detect patients infected by COVID-19.

The S&P/TSX Venture Health Care Index posted a Year-to-Date (YTD) return of 1.42 per cent, and the S&P/TSX Capped Health Care Index posted YTD return of 0.15 per cent, while one of these pharma companies posted a much higher YTD return of 118.6 per cent

On that note, let us look at some of these Canadian COVID-19 stocks to buy.

1. Immunoprecise Antibodies Ltd (TSXV:IPA)

The biotechnology company conducts research and supplies antibodies to a large community. Immunoprecise Antibodies held a market cap of C$ 171.22 million on September 14, operating in countries like Canada, Europe, etc.

In the first quarter of the fiscal year 2022, the biotech company posted revenue of C$ 4.6 million, increasing by 22 per cent Year-over-Year (YoY). The company incurred research and development costs of C$ 1.1 million in the same quarter.

Immunoprecise Antibodies developed a four monoclonal antibody cocktail to treat SARS-CoV-2, neutralizing against the SARS-CoV-2 Delta (B.1.617.2) variant. This serves as potential prevention of the virus and is undergoing its pre-clinical trials.

The stock price of the biotech company expanded close to 20 per cent on a quarter-to-date (QTD) basis and closed at C$ 8.85 apiece on September 13, 2021.

The company posted a price-to-book (P/B) ratio of 3.01 on September 14.

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2. SQI Diagnostics Inc (TSXV:SQD)

The diagnostics and research company conducts multi-layered blood tests and provides medical supports to patients. These tests analyze antibodies, proteins, etc. SQI Diagnostics also operates in countries like Canada, Europe, the US, etc.

The senior leadership of SQI Diagnostics is hopeful that the Food And Drug Administration (FDA) will provide a regulatory clearance of the RALI-Dx™IL-6 Severity test to be used in the US soon. This  RALI-Dx™IL-6 Severity test helps identify patients suffering inflammatory responses due to COVID-19.

SQI Diagnostics posted sales of C$ 0.3 million and incurred an R&D expense of C$ 2 million in Q3 FY21. During the quarter, the company increased its investment in the clinical development of its COVID-19 home antibody test.

The diagnostics company posted a P/B ratio of 19 and held a market cap of C$ 68.88 million on September 14.

The stock price of SQI Diagnostics traded close to 36 per cent above its 52-week low of C$ 0.14 (August 23, 2021) and closed at C$ 0.19 apiece on September 13. In the last month, the stock price gained 15 per cent.

Also Read: 4 Canadian pharmaceutical stocks to buy in 2021

3. Therma Bright Inc. (TSXV: THRM)

This progressive healthcare company incorporates technology-based innovative solutions, thereby addressing the complex medical and healthcare challenges.  Therma Bright Inc. stood with a market cap of C$ 103.12 million and outstanding shares of 219.41 million on September 14. Moreover, the debt-to-equity ratio of the company was 0.02 on this date.

As per the management of Therma Bright, it has developed a first-of-its-kind AcuVid™ COVID-19 Rapid Antigen Saliva Test. The saliva test has shown positive results in its clinical trials. The leadership of Therma Bright believes that once approved by the FDA, it will be the first saliva-based COVID-19 antigen test.

The stock price of Therma Bright climbed up by close to 119 per cent on a YTD basis and rocketed by 224 per cent over the past year. It traded 623 per cent above its 52-week low of C$ 0.06 and closed at C$ 0.47 on September 13.

Also Read: Chembio (CEMI) is rising. A COVID stock to buy?

4. Arch Biopartners Inc. (TSXV: ARCH)

The clinical-stage drug manufacturing company tests and develops new drugs to treat organ damage and other lung and kidney-related injury. Arch Biopartners got listed on the Toronto Stock Exchange Venture after its initial public offering (IPO) on October 9, 1996.

The company held a market cap of C$ 106.58 million and a return on equity (ROE) of 148.79 per cent (at the time of writing).

Arch Biopartners completed the Phase II trials of its lead drug LSALT peptide, a therapeutic agent for preventing acute kidney injury. Phase II trials were conducted to study the LSALT peptide to prevent organ inflammation in patients infected by COVID-19.

The stocks of Arch Biopartners were priced at C$ 1.72 at the market close of September 13. Over the past year, stocks returned 32 per cent and also on a QTD basis.

5. Quipt Home Medical Corp. (NASDAQ: QIPT; TSXV: QIPT)

The healthcare company provides respiratory services, in-house monitoring solutions, and other services catering to the management of diseases. In Q3 FY21, the company increased its centralized respiratory set-ups. The revenue during the quarter was US$ 18.6 million, up 41 per cent YoY. Its adjusted EBITDA margin was 20.2 per cent in the same quarter.

The stock price of Quipt Home Medical climbed up 35 per cent in the last nine months, and it expanded by 44 per cent over the past year. It traded on September 13, roughly 62 per cent above its 52-week low of C$ 4.8 (September 24, 2020), and closed at C$ 7.78 on September 13.

The valuation metrics show that the healthcare scrip held a P/B ratio of 3.61 and a D/E ratio of 0.49 on September 13.

Bottom line

As many of these companies await regulatory clearances of their COVID-related drugs and tests, their business models may be strengthened going forward. However, a surety in the success of these tests and medicines cannot be established now.