Market Overview

As Biotech Thrives On Vaccine Hopes, Traders Look Into The Sector's Diversity

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As Biotech Thrives On Vaccine Hopes, Traders Look Into The Sector's Diversity

If there is one prevailing trend that Wall Street is counting on during this period of great economic and social uncertainty, it’s the promise of biotech and pharmaceutical companies to seemingly save the world.

At the very least, they’re relying on the sector to save the market. Throughout 2020, returns from healthcare indexes such as the Russell 1000 Healthcare Index and the MSCI World Health Care Index have routinely outperformed broad market indexes like the S&P 500 and MSCI Europe and Asia Indexes. What’s more, the latest earnings results from the sector have shown nearly 90% of companies exceeding analyst expectations.

2020 Index Performances By Total Returns

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Source: Factset; Data as of November 16, 2020

Because of the growth outlook for the sector and the massive amount of interest surrounding it, trading research platform VantagePoint plans to focus on biotech and other exciting market sectors in an upcoming free demonstration of the predictive software’s A.I.-enhanced features.

In anticipation of the live demonstration, let’s take a look at some of the biggest movers in the biotech sector currently as well as some of the factors influencing their price moves.

The Pandemic Seizes The Market

Of course, Many of the major constituents driving growth in the biotech and pharmaceutical sector are tied in with the research and development of various vaccines, treatments and testing apparatuses aimed at combating the ongoing COVID-19 pandemic. And with news and trial results emerging and evolving on a near daily basis, traders are discovering new avenues by which to profit from the sector.

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While positive late-stage vaccine trial results from the likes of BioNTech SE (NASDAQ: BNTX) and Novavax (NASDAQ: NVAX), alongside or in partnership with pharmaceutical giants like Pfizer Inc. (NYSE: PFE) and  Moderna, Inc. (NASDAQ: MRNA), have obviously boosted the valuation of these companies. Each of these stocks are sitting at or near 52-week highs heading into December.

However, in addition to following the breaking news on these stocks, traders have also gravitated toward other companies involved in developing alternative vaccines or treatment in the wake of the advance guard.

Growth Throughout The Industry

Because while the leading COVID-19 vaccine candidates have garnered a high price tag, there are an array of follow-up companies that aim to deliver vaccines and treatments with different mechanisms of action from those currently dominating the headlines.

This includes firms like Inovio Pharmaceuticals, Inc. (NASDAQ: INO) and AstraZeneca PLC (NASDAQ: AZN), which stocks have both wavered as they have trailed Moderna and Pfizer in producing successful trial results in their respective vaccine formulations.

However, as vaccine approval and distribution ramps up and supply chain and efficacy issues begin to influence the market, additional news from Inovio and AstraZeneca may prove critical as the world attempts to find the quickest and safest path away from the pandemic.

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Another stock with potential surprise in store is Merck & Co, Inc. (NYSE: MRK). Although relatively quiet through the race for a vaccine, the company has invested heavily in M&A in an attempt to round out their vaccine research. Add to that the firm’s strong Q3 earnings report that well surpassed analyst expectations and even showed modest year-over-year growth and Merck stands as something of a dark horse in the biotech sector.

Anticipate The Unexpected

Ultimately, there is still a good deal of uncertainty still at play in the market thanks to the persistence of the global pandemic.

While biotech may be a prime driver of equity as the market’s hopes for a quick recovery outweigh its fear of the virus, traders should nonetheless leverage the best in institutional-level technology and analysis to anticipate market trends up to three days in advance.

To find out more, click here to sign up for an upcoming demonstration of VantagePoint’s cutting-edge research and analysis software.

 

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