Outside a few Gold & Silver Miners, my favorite stock today is CureVac (CVAC).
You may recall my introduction as a trade that I did on Trade Exchange:
10/05/2020 9:30 am
CVAC
CureVac was the first company the US government approached to make a COVID-19 vaccine, offering $1 billion before any trials. But Germany declared the company a national security interest and gave them $300 million to start clinical trials. The company had begun work on their vaccine in January, one of the first CureVac’s design of their mRNA is significantly different than at BioNTech and Moderna. Rather than a chemical modification of RNA, CureVac’s non-chemically modified mRNA method is designed to address more variations of coronavirus including the most prevalent D614G mutation of SARS-CoV-2 Some important points:
- CureVac’s low 8 mu dosage (vs BioNTech at 25 mu and Moderna at 100 mu) is less costly and has fewer side effects
- Phase 2 data will be updated by early Dec. Phase 3 should be finalized in March
- The EU has already ordered 425 million dosages
- The company’s RNA Printer™ could produce several grams of LNP-formulated mRNA (enough to produce more than 100,000 doses), within just a few weeks at various sites like hospital pharmacies, vastly improving logistics. Elon Musk is involved
- This platform can also produce mRNA vaccine candidates against multiple pathogens using the same technology, saving time, and reducing costs compared with other vaccine platforms The CVAC IPO was priced at $16 on August 14, opened at $44, and quickly went to $85 before dropping back to where it opened. We are buying in the mid to high 40’s with a six-month time horizon
Action: 10/05/2020 9:30 am
Position opened at $48.60
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Price 11/20 close: $79.69
Gain: +63.97% (six weeks)
Update:
According to our resident expert baz22, my CureVac (CVAC) October 5 write-up was a good one, but he says it should be updated.
He notes that CureVac’s mRNA coronavirus vaccine CVnCoV boasts two significant advantages over BioNTech/Pfizer and Moderna counterparts:
(1) refrigerated storage in that the CVnCoV vaccine can be stored at +41 degrees F, which is standard refrigerator temperature and remains stable at room temp for up to 24 hours in a ready-to-use setting, and
(2) only a single shot application without a booster shot is required.
Moreover, he says, most people are not aware that CVnCoV’s neutralizing antibodies matched those of BioNTech, and their CD 4 and CD 8 T Cell activation was excellent. CD T Cells will help durability and long-term efficacy of the vaccine.
In terms of CVnCoV testing, the product is in a Phase 1 study in 284 healthy adult volunteers and in a Phase 2 trial in 691 healthy adults. An all-important large-scale trial has not yet begun.
Last week, the CVAC price shot up on the announcement of the European Commission’s intent to order 405 million doses of CureVac’s CVnCoV drug as and when approved, as we had anticipated in our October 5 report. That formality, however, has put the CureVac name squarely in play.
Specifically, the EU authorized CureVac to provide up to 225 million doses asap with an option for an additional purchase of 180 million doses. The company says that an additional large-scale production facility supported by the European Investment Bank at the company’s headquarters in Germany is in development, and says it expects to announce partnerships with various vaccine developers and manufacturers in the coming weeks.
Some investors may be wondering if the stock has staying power. The biggest private investor is Dietmar Hopp, who was the co-founder of SAP, one of the world’s largest software companies. Other investors are the Bill and Melinda Gates Foundation, and a Saudi Wealth fund. The 23% ownership by the German Government, like the others, is unlikely to soon be in play, if ever. So, in my view, with clinical success and regulatory approval, the stock will quickly move much higher and potentially reach the market cap of Moderna. CVAC has a market cap of $13.23 billion vs $22.86 billion for BNTX and $36.71 billion for MRNA.
But keep in mind, as Baz says, “Remember, these messenger-RNA platforms that have been a huge success with the Covid-19 virus will also be applied to other clinical work.”
Although CureVac does not have the name today that is top-of-mind as an mRNA-based COVID defender, the company was founded in 2000, eight years before BioNTech, and ten years before Moderna, and they have been researching mRNA as a for-profit company longer than anyone. The company has achieved considerable success outside of its CVnCoV vaccine. Their CEO Franz-Werner Haas is highly regarded in the industry with an approval rating of 82/100 — as is BioNTech’s co-founder/CEO Ugur Sahin (94/100), and Moderna’s CEO Stephane Bancel (79/100).
Readers may be wondering why Pfizer is not mentioned here. That’s because their coronavirus drug is owned and developed by BioNTech, which like CureVac, is a German company.
For purposes of background, I will conclude this report with a write-up I found on Seeking Alpha that appears reasonable to me, a layman: “An mRNA-based coronavirus vaccine once injected instructs the body’s cells to create copies of the coronavirus protein. In turn, this is expected to prompt the immune cells to create antibodies to fight it. These antibodies will remain in the blood and fight the real virus if and when it infects the human body. They essentially turn cells into tiny drug factories. In addition to being speedier to manufacture and develop, a feature which helped Pfizer and Moderna quickly start clinical trials — mRNA is well-suited to rapid adaptation.”
Finally, I wish to say that, although the stock has increased in price by +64.0% since I first bought it with the introduction and rationale I gave October 5, just six weeks ago, I anticipate a double in price in the next six months. Investors should be watching for breaking news.
