The rush to find a vaccine to prevent, or a treatment to at least dampen the impact of, the coronavirus has been under way for months. Unsurprisingly, these aren’t the easiest product to develop, given that we’re still getting to grips with the finer details of the virus itself.
Some of the brightest minds globally are working at breakneck speed trying to find a vaccine. For pharmaceutical companies, developing vaccines/treatments also means a revenue stream for the successful firm. So which coronavirus-focused stocks are worth buying into?
Millionaire potential?
Claiming that a stock has the potential to make you a millionaire is bold. Yet for coronavirus vaccine or treatment stocks, this is genuinely viable. Just look at how news of a successful treatment test on certain patients drove the Synairgen (LSE: SNG) share price up 420% in one day! Other stocks in the US have seen similar surges, making it plausible that exceptionally large returns might lie ahead.
For investors, even with a relatively small investment, triple-digit returns pocketed in a short period of time would compound to help you towards the million mark.
My favourite coronavirus vaccine stock
Synairgen saw share price gains on its treatment test news. When a firm actually completes all clinical trials and has a vaccine on the open market, its share price would likely bounce even higher.
So which likely candidate is my favourite? If you’re looking for a FTSE 100 stalwart with good potential, then look no further than GlaxoSmithKline (LSE: GSK). The pharma giant is in a partnership with French company Sanofi to create a vaccine. Earlier this week, GSK reported discussions with the EU Commission about supplying over 300m doses of the potential product. In my opinion, such talks wouldn’t be happening if the partnership wasn’t close to offering something to the market.
The GSK share price rallied on this news on Monday. Yet I’d still buy now as there’s plenty of upside to be had. The share price is down 17% from the highs of the year, and I feel this could easily be eclipsed if confirmation comes through of a successful vaccine.
A treatment alternative
A lot of investors are bullish on the Synairgen share price, despite the huge rally already seen. Personally, I’m sceptical about investing in it, simply because its fate hangs on the treatment. At least with GSK, I’d feel confident holding the firm in my portfolio even if it fails in efforts to make a coronavirus vaccine because it has so many other powerful products.Â
But I do agree that there would be significant upside for Synairgen if it could produce a viable treatment. So for investors happy to take added risk, allocating a small proportion of your funds into Synairgen isn’t a bad idea. However, be warned that there could be a significant sell-off in the share price if news comes out that there are serious complications on bringing a treatment to market.
Overall, coronavirus vaccine/treatment stocks such as GSK and Synairgen do have the potential to make you a million. Rapid returns just on news headlines have already shown that. I would never recommend rushing into any investment though, especially a smaller firm like Synairgen. So Glaxo would be my pick for a topical investment with long-term appeal.