Why Are COVID Healthcare Stocks Moderna And Novavax Trending?

Summary

• Stocks of Moderna and Novavax ended their trading day with higher gains of 16 per cent and 22.5 per cent, respectively, on November 27.
• Half of the Canadian population could be vaccinated for COVID-19 by September 2021, Prime Minister Justin Trudeau said at a recent address.
• In the year-to-date (YTD) performance, Moderna’s scrips rocketed nearly 497 per cent.
• Stocks of Novavax zoomed over 3,042 per cent YTD.

Stocks of potential COVID-19 vaccine makers Moderna (MRNA:US, NASDAQ: MRNA) and Novavax (NVAX:US, NASDAQ:NVAX) traded higher on Friday, November 27. This surge came after Oxford-AstraZeneca’s (AZN:US, NASDAQ:AZN) reported that they would need to have another last-stage testing for their COVID-19 vaccine as a major dosing error was made in the previous trial.

Moderna stocks ended trading on Friday with over 16 per cent surge, while Novavax added a 22.5 per cent growth in just one day.

Meanwhile, Prime Minister Trudeau said during an address on Friday that about half of the Canadian population could be vaccinated for COVID-19 by September 2021 if all goes well. Canada is currently amid a second COVID-19 wave, and daily positive cases are hitting the record highs even with increasing efforts by provinces to shut down businesses and curb public meetings.

Health Canada, on the other hand, has informed that it could approve COVID-19 vaccines by December this year and vaccination could start in the first quarter of 2021.

Let us a closer look at the stocks of Moderna Inc and Novavax Inc to understand their recent performances.

Moderna Inc (NASDAQ:MRNA)
Current Stock Price: US$ 127.03

Cambridge-based Moderna Inc develops medicines based on messenger RNA. The company reported on November 25 that the European Commission has agreed to purchase up to an additional 80 million doses of mRNA-1273, Moderna’s COVID-19 vaccine.

Under this agreement, the European Commission could expand its procurement of mRNA-1273 from 80 million to up to 160 million shots. The agreement needs to be finalized following a short assessment period by the European Union Member Nations.

Moderna had announced in its exchange filing on November 16 that its vaccine has an efficacy of 94.5 per cent, as per the last-phase study. It claimed that its vaccine could stay refrigerated up to 30 days, longer than earlier thought.

MRNA Stock Performance

The bio-medical company’s stock swelled over 88 per cent in the last three months. In the year-to-date performance, its scrips rocketed nearly 497 per cent. Stocks of Moderna have soared nearly 106.55 per cent in the last six months.

Its 10-day average stock trading volume climbed over 24 million, while its 30-day average trading volume stands at 12.83 million.

The US$ 50.26-billion market cap company’s price-to-book (P/B) ratio is 18.225, debt-to-equity ratio is 0.08 and price-to-cash flow (P/CF) ratio is 60.20, as per the TMX website.

MRNA Financial Highlights

In the third quarter of 2020, Moderna received US$ 1.1 billion in client payments for the supply of mRNA-127, registered as deferred revenue. The company posted research and development (R&D) costs of US$ 344.5 million for the three months ended September 30, 2020, compared to US$119.6 million in Q3 2019.

It also recorded cash, cash equiva­­lents and investments of US$ 3.97 billion as of September 30, 2020.  

In its 2020 outlook, Moderna said that it is expecting positive net cash in the range of US$ 0.1 billion and US$ 0.3 billion.

Novavax Inc (NASDAQ:NVAX)
Current Stock Price: US$ 125.69

Biotech company Novavax Inc has advanced its clinical production of NVX ‑ CoV2373 with the introduction of first Phase-3 testing of its COVID-19 vaccine candidate.

Novavax Stock Performance

The healthcare stock has surged nearly 54.5 per cent in the last one month. Its scrips zoomed over 3,042 per cent this year and surged by 173 per cent in the last three months.

Novavax Inc’s price-to-book (P/B) ratio is 75.63 and debt-to-equity (D/E) ratio is 4.41, while its price-to-cash flow (P/CF) ratio stands at 73.70, according to the data available on the TMX portal. Its current market cap is approximately US$ 8 billion.

Novavax’s 10-day average stock trading volume has increased to over 4 million. Its 30-day average trading volume stands at 3.43 million.

Novavax Financial Highlights

Novavax Inc secured financing of nearly US$ 1.6 billion for the last-stage clinical development of its NVX‑CoV2373 from the US government via Operation Warp Speed (OWS). The company recorded a total of US$ 2 billion in financing through OWS as of November 9.

Fuelled by the funding, Novavax posted a revenue of US$ 157.0 million in the third quarter of 2020, up from that of US$ 2.5 million in Q3 2019.

At the same time, its R&D expenses rose to US$ 294.1 million in Q3 2020, as compared to US$ 18.6 million in Q3 2019. This surge was driven by the increased development operations relate to its COVID-19 vaccine candidate.