Why This Popular Vaccine Stock Isn’t on My Buy List

Legacy Research Group

December 8, 2020

Chris’ note: One of the most profitable trends we track for you is the boom in biotech. Biotech stocks our tech expert, Jeff Brown, has picked at our Exponential Tech Investor advisory are up 116%... 176%... 180%... 186%... even 212%.

Now, he’s identified one biotech company on the verge of curing one of mankind’s most devastating diseases. If it’s successful, Jeff says its stock could soar up to 1,000% – in a single day.

Tomorrow night at 8 p.m. ET, he’s hosting a special event to share the details. Reserve your free spot here to make sure you don’t miss out on this time-sensitive opportunity.

As Jeff explains below, he’s also recommending you steer clear of one of the most talked-about vaccine stocks right now…


Why This Popular Vaccine Stock Isn't on My Buy List

By Jeff Brown, Editor, The Bleeding Edge

Jeff Brown

Moderna (MRNA) used to be a boring stock.

Look at this chart from its initial public offering (IPO) back in 2018 until the beginning of this year…

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Moderna essentially traded flat for over a year. Headlines over that time period announced things like “Moderna Stock Pops 4.2% on Clinical Update” and “Here’s Why Moderna Lost 29.6% in June.”

Not the most exciting stock to have in your portfolio…

But then in late February, everything changed.

Have a look at Moderna’s progress this year…

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It’s taken off… At the time of writing, it’s soared 746% year to date. Investors have made over eightfold their money in less than a year.

You likely already know what happened…

Moderna is one of the companies that leapt into the ring to develop a vaccine for COVID-19. Last month, it announced trial results showing its vaccine was 94.1% effective.

Today, I’ll share why, while Moderna is one of a handful of biotechnology companies getting headlines right now, it’s far from the only winner in this new golden age of biotech.

Moderna's Unique Approach

What makes Moderna’s approach unique is that its vaccine uses messenger RNA (mRNA) to produce an immune response.

Our genetic code determines our traits and bodily functions. It’s a genetic “blueprint.”

But the genes themselves don’t do the work. They require proteins to carry out specific functions.

mRNA is the link between genes and proteins. The information within genes is transcribed into mRNA. That mRNA then tells the body what proteins to produce to carry out different functions.

Moderna’s vaccine mimics this process. It uses synthetic mRNA to tell the body to produce proteins that look like COVID-19. That helps the body produce antibodies to fight the virus and build immunity.

Here’s the point I want to emphasize…

Before COVID-19, this type of synthetic biology was mostly theoretical. It was like the “Wild West” of the biotechnology space.

But the pandemic has forced the biotech industry to leap forward.

Moderna designed a vaccine that was ready for a phase 1 clinical trial in just 42 days. That’s incredible. It normally takes years to get to a working vaccine.

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This September, Moderna released data demonstrating that its COVID-19 vaccine is effective in older adults.

In fact, the vaccine created an immune response in people over 56 years old that was on par with the response observed in adults 18-55 years old.

And on November 30, Moderna released the full analysis for its Phase 3 clinical trials for its vaccine.

The data was encouraging, suggesting the vaccine is 94.1% effective in preventing the spread of COVID-19.

The vaccine appears to be safe as well, with only headaches and other mild reactions in those who’ve taken it.

And Moderna noted that its vaccine was 100% effective against severe cases of COVID-19.

This is huge.

On the back of these results, Moderna filed for emergency use authorization with the U.S. Food and Drug Administration (FDA) at the end of November. That means the vaccine could be available to many within mere days or weeks.

As exciting as this is, the developments at Moderna speak to a larger trend. It’s something every serious technology investor should be paying attention to.

A Golden Age of Biotechnology

It may sound strange to say anything “good” has come from the COVID-19 pandemic. But for the biotech industry – and biotech investors – 2020 has been a banner year.

The industry has shown that it’s able to move faster than we’ve ever imagined. Vaccines that usually take years of development are appearing in just months.

The pandemic has opened the doors for radical new approaches to vaccines and therapies that would have seemed impossible even just a year ago.

That’s led to a flood of capital into this space. Venture capital funding of biotech companies is at a record high… reaching an astounding $34.6 billion so far this year.

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And biotech IPOs have raked in roughly $23 billion for drug development this year.

There’s suddenly more awareness of biotech companies than ever before. COVID-19 has thrust them into the spotlight.

This leads to an obvious question…

Which biotechnology stocks do we want to own?

My No. 1 Biotech Recommendation Today

Readers may be surprised to learn that Moderna isn’t a stock currently in any of the model portfolios for my paid research services…

At the time of writing, Moderna’s enterprise-value-to-sales (EV/sales) ratio is at 253. That’s the equivalent of 253 years of revenue, not profit. While the number has dropped from over 300 in recent months, it’s still an extremely expensive valuation.

That means investors getting in at this level will likely lose money in the long run. A valuation like this just isn’t sustainable.

But there’s another stock… a small-cap biotech… that I’ve been watching for some time.

For comparison, its EV/sales ratio is about 22 right now. And this company is on the verge of making a truly groundbreaking announcement about one of its clinical trials.

When that news breaks, I believe this small stock could soar as much as 1,000% in a single day.

This is a stock I don’t want any of my readers to miss.

If you want to find out all the details, I’m putting together a special presentation called The Cure Event. It will air tomorrow night at 8 p.m. ET.

You can reserve your spot for free right here.

I look forward to seeing you then.

Regards,

Jeff Brown
Editor, The Bleeding Edge

Like what you’re reading? Send your thoughts to feedback@legacyresearch.com.

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