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Three stocks backing a Covid-19 breakthrough

The UK, like many countries, is in lockdown as the battle against Covid-19 continues, but that doesn’t mean we’re not busy.

The past few weeks have seen engineering companies step outside of their traditional sectors to offer their mechanical expertise to make ventilators and essential medical equipment– Dyson and Formula One’s McLaren are just two examples.

And while the Government and its advisers concentrate on slowing the spread of the coronavirus, scientists at pharmaceutical and biotech firms are racing against the clock to find a vaccine or treatment, too.

But out of the many – and there are numerous – pharmaceutical and biotech companies, which seem to be in the best position to help us beat this killer disease and, in turn, potentially thrive as a business during these difficult times?

For investors, the answer might not only save countless lives, but might prove to be a rising investment, too.

Gilead Sciences

This biotech giant has been working on an experimental drug called ‘Remdesivir’, which is shaping up to be a promising potential treatment for the Covid-19 disease.

Having already been used in animal trials for treating Sars and Mers – both considered to be structurally similar to Covid-19 – and demonstrating positive results, it is involved in phase three clinical studies.

In a recent update, the company’s CEO Daniel O’Day, said: “The safety and efficacy are not yet known. Multiple clinical trials for Remdesivir are underway, involving thousands of patients with COVID-19 across the world.”

Year to date, the company’s share price has risen 20% and is currently sporting a dividend yield of 3.5%.


Your capital is at risk. 

Quest Diagnostics

Testing has been a significant issue in the world’s fight against Covid-19. The kits can be difficult to get hold of and, in some cases, haven’t been entirely reliable. This is perhaps why there is some excitement around Quest Diagnostics, which has launched new Covid-19 testing services.

While this isn’t a test in itself, Quest is assisting doctors in identifying who has the disease and it can currently process up to 200,000 tests in a week. The boost in testing means that those with the virus can be identified sooner, isolated and treated better, and ultimately it can limit the spread of the virus.

For an investor, this stock requires some caution as year to date its share price has suffered, falling more than 30%. In fact, the work it is doing to assist the fight against coronavirus is yet to show in its share price so it could be one to watch, rather than dive in immediately.


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Johnson & Johnson

Well-known for products such as baby talc and shampoo, Johnson & Johnson has stepped up to develop a coronavirus vaccine. The company has committed $1bn to the project and has said it expects to start clinical studies in September at the latest, with the first batches of the vaccine to be available for emergency use authorisation in early 2021.

Alex Gorsky, chairman and CEO at Johnson & Johnson, recently said: “The world is facing an urgent public health crisis and we are committed to doing our part to make a Covid-19 vaccine available and affordable globally as quickly as possible.”

Year to date, the company has struggled, losing around 8% of its value. However, the announcement of the promising vaccine less than a week ago has boosted that share price by 5% – it could be a promising start for those that are looking for a longer-term investment opportunity.


Your capital is at risk. 

With any investment relating to the research and development of a vaccine, treatment or testing, there is an element of risk. New drug testing fails more frequently than it succeeds, and what once was a promising investment can plummet overnight.

So, despite all these promising noises and the hope they may bring, investors still need to examine these companies properly before committing.

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This is a marketing communication and should not be taken as investment advice, personal recommendation, or an offer of, or solicitation to buy or sell, any financial instruments. This material has been prepared without having regard to any particular investment objectives or financial situation, and has not been prepared in accordance with the legal and regulatory requirements to promote independent research. Any references to past performance of a financial instrument, index or a packaged investment product are not, and should not be taken as a reliable indicator of future results. eToro makes no representation and assumes no liability as to the accuracy or completeness of the content of this publication, which has been prepared utilising publicly-available information.

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