While the stock market is facing significant volatility right now, there is a decent chance it will still perform fairly well over the next five years. That’s what we have come to expect from equities, given their track record over the past decades. So, it might still be a good idea to invest in stocks right now, but not just any will do. Let’s consider two healthcare companies that have the potential to perform better than broader equities through the next half a decade: Moderna (MRNA +0.06%) and Abivax (ABVX 1.20%).
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1. Moderna
Moderna’s shares could soar as it advances its mRNA platform. Compared to older vaccines, those of the mRNA variety have advantages, including being much faster to produce and sometimes eliciting stronger, more targeted immune responses. Moderna was able to develop and market a coronavirus vaccine quickly for a reason. Now, it is going after other targets. Moderna developed a flu vaccine that is being considered for approval in the U.S. Although there are already options on the market, their efficacy generally falls between about 40% and 60% — Moderna is looking to improve that.
Today’s Change
(0.06%) $0.03
Current Price
$53.57
Key Data Points
Market Cap
$21B
Day’s Range
$52.30 – $54.68
52wk Range
$22.28 – $59.55
Volume
3.9M
Avg Vol
11M
Gross Margin
44.29%
The biotech’s most promising candidate, though, might be mRNA-4157, an investigational personalized cancer vaccine. Moderna and its partner on this project, Merck, recently published five-year follow-up data from a phase 2 clinical trial showing that mRNA-4157, in combination with Keytruda, significantly reduced the risk of recurrence or death compared with Keytruda alone in patients with advanced melanoma. mRMA-4157 is being investigated across several cancer types in phase 2 and phase 3 studies.
Progress with this candidate is a key reason why Moderna’s shares are already up about 73% this year, and the company could maintain a somewhat similar (though likely not quite as impressive) momentum over the next half a decade as it makes headway with other programs. Now, there are some risks, including the very real possibility of clinical and regulatory setbacks that could sink the stock price. Investors should keep that in mind. But those comfortable with above-average risk should still consider putting a little money into this stock.
2. Abivax
Abivax, a biotech company based in France, is looking to shake up the highly competitive market for ulcerative colitis (UC) drugs. It won’t be easy: Some of the largest pharmaceutical companies dominate this niche. But Abivax has a secret weapon. Its leading candidate, obefazimod, looks very promising. To see why, consider that many immunosuppressants indicated to treat UC, although effective, can weaken patients’ immune systems and make them more prone to certain diseases. JAK inhibitors, a class of immunosuppressants with several approved for UC, come with a heightened risk of serious cardiovascular events.
Obefazimod isn’t a traditional immunosuppressant. It could potentially treat patients with UC just as effectively — perhaps even more so — while avoiding the serious drawbacks of its competitors.
Today’s Change
(-1.20%) $-1.33
Current Price
$109.37
Key Data Points
Market Cap
$8.8B
Day’s Range
$108.37 – $110.99
52wk Range
$4.77 – $148.83
Volume
43K
Avg Vol
1.2M
In a phase 3 study, obefazimod hit its primary endpoint of clinical remission in patients with moderate-to-severe UC. What’s even more encouraging is that, in this trial, about 47.3% of patients had been previously treated unsuccessfully, including many with previous exposure to JAK inhibitors. If Abivax can earn approval and challenge these well-established franchises in UC that generate billions in annual revenue, the company could see its sales soar over the next five years.
And of course, Abivax should eventually seek label expansions beyond UC and into other related conditions. Now, there is still some work to do. Obefazimod isn’t yet approved. Abivax is currently awaiting data from a maintenance study in UC patients, which should be released during the second quarter. Positive results here could jolt the stock. As usual, though, Abivax will be extremely susceptible to clinical setbacks, and not having a single product on the market makes the stock especially risky.
That said, obefazimod’s outstanding prospects could allow the stock to soar, perhaps through an acquisition, so risk-tolerant investors should give it a second look.