The coronavirus continues to capture mainstream media attention, with new cases being identified in countries like Canada while existing cases in countries like the U.S. appear to be multiplying. The death toll has just hit 80, with the number of American patients diagnosed with the coronavirus growing from just one before the weekend to now five. The biggest winners of this outbreak aren’t necessarily the large pharmaceutical companies, but many of the smaller, niche biotech stocks out there.
Vaccinex (NASDAQ: VCNX) was one of the biggest winners on Friday, shooting up almost 40% as the small-cap specialty vaccine producer joined other similar stocks in what was an impressive rally. There wasn’t really any announcement or press release from the company to justify this move, so the only other excuse for why it jumped that much is due to the broader coronavirus-stoked rally on Friday. This seems even more likely when one realizes Vaccinex isn’t in the market of creating flu vaccines which could counter the coronavirus. Instead, the company focuses on vaccines to treat cancers, autoimmune disorders, and neurodegenerative issues.
Before this surge, Vaccine did announce it had received an award from the Alzheimer’s Drug Discovery Foundation. “This is the second award from a major Alzheimer’s research foundation to be announced recently in support of this study in Alzheimer’s disease,” said Maurice Zauderer, President & CEO of Vaccinex in response to the announcement.
In addition to Vaccinex, other coronavirus-related vaccine producers have shot up as well on Friday. NanoViricides recovered from its losses from earlier in the week, gaining 46% on Friday. Novamax, which was another major winner last week, gained only 0.8%, while Inovio Pharmaceuticals and ImmuCell rose by 10% and 4.4% respectively.
This group of companies, which are for the most part small biotech stocks, have enjoyed plenty of publicity over the past few days and likely will remain in the limelight for quite a while longer. However, stocks as a whole tend to do bad when outbreaks reach their peak. Back in 2003 when the number of SARS cases was growing, Hong Kong-based stocks ended up losing 10% in March and April. If the coronavirus continues to spread in the U.S., it wouldn’t be surprising if American stocks end up falling as well, breaking what’s been a record-setting year for the NASDAQ and the S&P 500.
Even if the coronavirus remains contained in China, for the most part, U.S. companies that derive income from the country will be hurt. Some stocks in the travel industry that operate a lot in China, for example, have already taken a bit of a beating. United Airlines, for instance, fell by around 9% this week alone.
Vaccinex Company Profile
Vaccinex Inc is a clinical-stage biotechnology company. It is engaged in the discovery and development of targeted biotherapeutics to treat serious diseases and conditions with unmet medical needs, including cancer, neurodegenerative diseases, and autoimmune disorders. The company’s lead platform technologies include SEMA4D antibody platform and ActivMAb antibody discovery platform. Its lead product candidate VX15 is in clinical development for the treatment of NSCLC, osteosarcoma and Huntington’s disease and additional product candidates VX5 and VX25 are in earlier stages of development. – Warrior Trading News
