U.S. Stocks Set To Open Higher As U.S. Approves Remdesivir For Use Against COVID-19

U.S. Approves Gilead’s Remdesivir As COVID-19 Drug

Shares of Gilead are gaining about 4% in premarket trading as U.S. approved remdesivir as a treatment for COVID-19. While many drugs have been tested to fight against the disease, only Gilead’s remdesivir managed to get regulator’s approval.

This approval will likely provide support to other companies in the sector. Vaccine developers Pfizer, BioNTech, Moderna are also gaining ground ahead of the market open.

The first drug approved for the use against coronavirus could provide additional support to the general market as traders are eager to buy stocks on any hint that the world will be able to solve the coronavirus crisis.

Traders Remain Focused On Stimulus Negotiations

This week’s news flow was dominated by reports about the ongoing stimulus negotiations. The market action was choppy as traders tried to evaluate whether Republicans and Democrats will be able to reach a compromise deal before November elections.

House Speaker Nancy Pelosi has recently stated that negotiations continued to progress. However, it remains to be seen whether Republicans will be ready to vote for a huge stimulus package that is proposed by Democrats.

Today, S&P 500 futures are gaining ground in premarket trading as traders are in optimistic mood ahead of the weekend. However, the situation may change quickly if evidence emerges that aid negotiations have stalled.

All Eyes On Flash PMI Data For October

Today, U.S. will release Flash PMI reports for October. Manufacturing PMI is expected to increase from 53.2 in September to 53.4 in October while Services PMI is projected to stay unchanged at 54.6.

Reports from other countries signaled that the services segment was struggling amid a second wave of the virus.

Euro Area Services PMI declined from 48 in September to 46.2 in October compared to analyst consensus of 47. Numbers below 50 show contraction. In the UK, Services PMI declined from 56.1 to 52.3 while analysts expected Services PMI of 54.

A weaker-than-expected U.S. Services PMI report will signal that economic recovery is losing steam and may put some pressure on stocks, although stimulus negotiations will remain the most important driver for the market.

For a look at all of today’s economic events, check out our economic calendar.

Novavax to Deliver 60 million Coronavirus Vaccine Doses to UK; Buy With Target Price of $227

Novavax Inc, an American vaccine development company headquartered in Maryland, said the UK government will purchase 60 million doses of coronavirus vaccine, NVX-CoV2373, beginning as early as the first quarter of 2021, sending its shares up about 6% in pre-market trading on Friday.

Novavax said the Phase 3 clinical trial will be a randomized, double-blind, placebo-controlled efficacy study in approximately 9,000 adults 18-85 years of age in the UK.

The trial is expected to begin in the third quarter of this year, with the UK government supporting and providing infrastructure to Novavax in the execution of the trial. The trial will assess the ability of NVX-CoV2373 to protect against symptomatic COVID-19 disease as well as evaluate antibody and T-cell responses.

Novavax’s is among the most advanced in developing the coronavirus vaccine, but not ahead as AstraZeneca PLC and Moderna Inc.

“We are honoured to partner with the UK government to deliver a vaccine that could provide vital protection in the fight against the global health crisis,” Stanley C. Erck, President and Chief Executive Officer of Novavax said in a statement.

“Our Phase 3 clinical trial in the UK will be a critical component to assess the efficacy of NVX-CoV2373, which in a Phase 1 trial has already demonstrated to be generally well-tolerated and to elicit robust antibody responses. We are also delighted to expand our collaboration with FUJIFILM Diosynth Biotechnologies to manufacture our antigen at its UK site.”

Novavax shares closed over 7% higher at $133.28 on Thursday, rising about 6% in pre-market trading on the last day of the week. The stock has surged over a massive 3,200% so far this year.

Novavax stock forecast

Five analysts forecast the average price in 12 months at $227.60 with a high forecast of $290.00 and a low forecast of $105.00. The average price target represents a 70.77% increase from the last price of $133.28. From those five, four analysts rated ‘Buy’, none analyst rated ‘Hold’ and one rated ‘Sell’, according to Tipranks.

H.C. Wainwright raised their 12-month price target to $290 from $132 and JP Morgan upped it to overweight from neutral, raising the target price to $275 from $105. We think it is good to buy at the current rate and target $227 as 100-day Moving Average and 100-200-day MACD Oscillator signal a strong buying opportunity.

Analyst comment

“Shares of Novavax have significantly outperformed the industry in the year so far. Novavax’s efforts to develop influenza vaccine candidate NanoFLu look encouraging. COVID-19 vaccine program also progresses well,” noted equity analysts at ZACKS Research, who gave the price target of $176.

“If successfully developed and launched, this can be a huge boost to the company given the absence of an approved vaccine to address the deadly COVID-19 pandemic. However, in the absence of a marketed product, Novavax is yet to generate any revenues from product sales. Dearth of collaboration contracts too remains a woe. Thus, any delay in the pipeline development will hurt the stock.”

Moderna Receives Additional $472 Million from BARDA for COVID-19 Vaccine; Target Price $90

Moderna Inc, an American biotech company focused on drug discovery, said that the U.S. government’s Biomedical Advanced Research and Development Authority (BARDA) has committed an additional $472 million in funding to support scaling up of manufacturing and clinical development of its novel coronavirus vaccine.

That additional commitment would support late-stage clinical development including the expanded Phase 3 study of the Company’s mRNA vaccine candidate (mRNA-1273) against COVID-19.

The total value of the award is now approximately $955 million from the BARDA, including $483 million which the U.S.-based drugmaker received in April.

Moderna said it remains on track to be able to deliver approximately 500 million doses per year and possibly up to 1 billion doses per year, beginning in 2021 from the company’s internal U.S. manufacturing site and strategic collaboration with Lonza.

Britain’s AstraZeneca Plc, Novavax Inc and Pfizer Inc, have also received funding from BARDA to support the rapid development of vaccines to prevent COVID‑19.

Executive comment

“Encouraged by the Phase 1 data, we believe that our mRNA vaccine may aid in addressing the COVID-19 pandemic and preventing future outbreaks. We thank BARDA for this continued commitment to mRNA-1273, our vaccine candidate against COVID-19,” said Chief Executive Officer Stéphane Bancel.

Moderna stock forecast

Seventeen analysts forecast the average price in 12 months at $91.87 with a high forecast of $134.00 and a low forecast of $65.00. The average price target represents a 25.49% increase from the last price of $73.21. From those 17, 13 analysts rated ‘Buy’, four rated ‘Hold’ and none rated ‘Sell’, according to Tipranks.

Morgan Stanley target price is $90 with a high of $279 under a bull scenario and $7 under the worst-case scenario. Several other equity researches have also recently upgraded their stock outlook for Moderna. SVB Leerink initiates with market perform, $65 price target; JP Morgan lowered its rating to ‘Neutral’ from ‘Overweight’, raised target price to $89 from $60 and downgraded shares on valuation. Moderna had its target price raised by Piper Sandler to $134 from $100.

We think it is good to buy at the current level and target at least $90 in the short-term and $112 in a bull-case scenario as 50-day Moving Average and 100-200-day MACD Oscillator signals a strong buying opportunity.

Analyst view

“We are Overweight Moderna. The company has taken an industrialized approach to developing mRNA based therapeutics and has rapidly generated a broad pipeline of 21 programs, 11 of which have entered clinical development. We believe Moderna’s mRNA drug development platform is more diversified and scalable compared with competitors, and is validated through broad partnerships with Merck and AstraZeneca,” said Matthew Harrison equity analyst at Morgan Stanley.

“The COVID-19 vaccine programs provide a significant acceleration of the path to commercialization and validation of the Moderna platform. We are positive on the early data and look forward to the progress. We see vaccines and rare diseases as the key valuation drivers of the company. We derive our PT from a DCF based on our forecasts of Moderna’s mRNA based product candidates through 2040E. We use a 12.5% discount rate and a 2% terminal growth rate.

Upside and Downside Risks

Meeting timelines and continuing to expand a diversified pipeline; Supporting clinical data across several modalities; Launch vaccines in multiple indications including CMV and COVID-19, Morgan Stanley highlighted as upside risks to Moderna.

Efficacy and/or safety concerns cause investors to write-off subsequent readouts across additional modalities. Delays in Moderna’s ability to generate significant clinical data. Stronger than expected competitor data, Morgan Stanley highlighted as downside risks.

US Stock Market: Multiple States Investigate Apple, Disney Delays Major Film Releases, Fear Gauge Rises

Thursday’s U.S. stock market losses led to investors seeking protection in options and Treasurys. This drove the Cboe Volatility Index (VIX) – seen by Wall Street as the market’s best “fear gauge” – to 26 and benchmark 10-year Treasury yields to 0.57%.

Some of the volatility was fueled late in the session by extreme “whipsaw” action. The wild, two-sided trade that steepened the late session selloff was triggered by a report from a watchdog group that said Apple Inc faces consumer protection investigations in multiple states. Apple traded 4.5% lower after the report.

Apple Faces Deceptive Trade Practices Probe by Multiple U.S. States:  Axios

Multiple U.S. states are investigating Apple Inc for potentially deceiving consumers, according to a March document obtained by a tech watchdog group, Reuters reported.

The Texas attorney general may sue Apple for violating the state’s deceptive trade practices law in connection with the multi-state investigation, according to the document, which was obtained by the Tech Transparency Project.

The document did not provide additional details.

The office of the Texas attorney general declined to comment. Apple did not immediately respond to a Reuters request for comment.

Apple has faced class-action lawsuits from consumers alleging that it deceived them about slowing the performance of iPhones with aging batteries. The company agreed to pay up to $500 million to settle one such lawsuit earlier this year.

Apple is also facing lawsuits alleging that it knew and concealed how the “butterfly” keyboards on its MacBook laptops were prone to failure.

Treasury Yields Fall Slightly After Jobless Claims Come in Worse Than Expected

Treasury yields dipped on Thursday after data showed U.S. jobless claims rose more than expected last week. The yield on the benchmark 10-year Treasury note fell one basis point to 0.584% and the yield on the 30-year Treasury bond were also lower at 1.274%. Yields more inversely to prices.

US Companies Making Headlines After Thursday’s Bell

Intel’s stock dropped 8% in extended trading after the company offered disappointing third-quarter guidance. Intel released its second quarter earnings, beating predictions of analysts surveyed by Refinitiv.

After Intel said the company’s 7mm-based CPU product timing is delayed, shares of Advanced Micro Devices climbed 7% in after hours.

Moderna’s stock dropped 2% in extended trading after falling 9.49% earlier in the day. The drop comes after the U.S. Patent and Trademark Office ruled Moderna does not have a claim to a patent held by a rival company.

The ruling could potentially delay Moderna’s race to produce a coronavirus vaccine. Shares of BioNTech jumped 2% while Novavax’s stock fell 1% in after hours.

Disney’s stock fell 1% after the closing bell. The company announced Thursday afternoon that its movie “Mulan” is delayed indefinitely and all Star Wars films and Avatar sequels have been pushed back a year due to theater closures and production shutdowns spurred by the coronavirus pandemic.

For a look at all of today’s economic events, check out our economic calendar.

Top COVID Play Moderna Reverses After Hitting All-Time High

Moderna Inc. (MRNA) rocketed more than 14% overnight, hitting a 2-month high after the New England Journal of Medicine reported positive results in Phase 1 trials of an investigational vaccine designed to protect against SARS-CoV-2, better known as COVID-19. The former small cap, now valued at $31 billion, has garnered greater interest than dozens of other vaccine-focused biotech and pharmaceutical plays due to encouraging early test results. Investors and speculators have taken note of their progress, lifting the stock more than 400% so far in 2020.

Moderna Encouraging Phase 1 Results

In a Wednesday interview, Moderna Chief Medical Officer Dr. Tal Zaks said the vaccine had produced antibodies that blocked the ability of the virus to enter the cell. More importantly, it’s induced a ‘rapid and strong immune response’, producing antibodies at or above the level of those previously diagnosed with the infection. He indicated the compound was well-tolerated by Phase 1 subjects but admitted a series of ‘adverse events’ that included arm soreness, flu-like symptoms, fatigue, and headache.

According to the U.S. government’s National Institutes of Health, the Phase 1 trial had no participants over the age of 55, which is COVID-19’s most affecting age group, dampening investor enthusiasm after the opening bell. In addition, Moderna has yet to fully evaluate the durability of the immune responses. The company has already begun enrollment in Phase 2 and will launch a Phase 3 efficacy trial later this month. Even so, few analysts or epidemiologists expect a safe and effective commercial vaccine before the start of 2021, at the earliest.

Wall Street And Technical Outlook

Wall Street consensus rates the stock as a ‘Strong Buy’, based upon 14 ‘Buy’ and just 2 ‘Hold’ recommendations. It isn’t surprising that no analysts are recommending that shareholders sell their positions, given massive upside potential. Of course, there’s also tremendous risk in holding this stock because a roadblock or setback could trigger a high percentage decline, especially if the delay provides a time-to-market advantage to a major competitor.

Moderna’s technical outlook looks extremely bullish but biotech plays have the power to ignore classic rules of price action when major catalysts hit the headlines. The stock broke out above the 2019 high near 30 in March and nearly tripled in price into the May at 87.00.  It traded just above that level at the start of Wednesday’s U.S. session, setting its sights toward triple digits. However, heavy speculation routinely attracts ‘weak hands’, raising odds for multiple whipsaws.

Moderna, S&P: Vaccine Hopes

Moderna

Source: Bloomberg

But it increasingly looks like by the time it is ready, most people indeed will already have immunity to the virus. In the meantime, Moderna is enjoying spikes of investor attention.

The latest update is that it got one step closer to the vaccine pushed its stock from the rage of $60 to $75. Needless to say, if the reports informed us tomorrow that another testing stage is cleared, we would see this stock already somewhere at its recently made all-time high above $85. Trajectory zone 2 would be the channel of movement in this case.

In fact, Moderna’s stock may well get to those highs anyways: fundamentally, the interest for anti-virus business will keep its momentum months or even years ahead, even if tomorrow is no virus at all. So Moderna will see its rise, just it will be a slow case scenario – the one that corresponds to trajectory zone 1.

S&P 500

For the stock market, the vaccine hope seems to be the only “joy” that keeps the optimism on the stage. With the S&P, currently, we are almost exactly at the previous high of 3 320, and in an obvious consolidation. Meaning, the market is not really sure what to look at more: still spreading infections in the US of the vaccine hopes. Today, it seems the latter is taking the upper hand. What the next step is going to be?

An optimistic scenario suggests we will see Trajectory 1 giving the green light to bulls and repeating the pattern of the previous upward wave the S&P followed in May. How probable is that? Quite probable, given that the reports about vaccine developments keep coming more often.

A pessimistic scenario as per Trajectory 3 suggests that we are actually at the tip of another “inside wave” which will bounce down from the resistance of 3 230. How probable is that one? Also very probable: clearing testing processes is good, but we don’t have the vaccine yet. It may take months before we finally see it.

A moderate scenario presumes that the market will overlook the absence of the vaccine and take on a more positive mood. That will be Trajectory 2.

The thing is that, indeed, it may be not until the very end of 2020 when the vaccine eventually gets done. Everyone knows that. If the S&P was only waiting for the vaccine to finally get developed, then it would be going sideways between 2 980 and 3 230 for months from now. Is that likely?

No. Regardless of the vaccine process, the more we move into the future, the more the market becomes insensitive to the reality of infections and, therefore, independent from the vaccine hopes. Why? Because with the vaccine or without it, life goes on. And even the virus is now on the rise in the US – again – it will slow down pretty soon. So the question is not “if” but “when”. And the market is bored waiting.

This post is written and submitted by FBS Markets for informational purposes only. In no way shall it be interpreted or construed to create any warranties of any kind, including an offer to buy or sell any currencies or other instruments. 

The views and ideas shared in this article are deemed reliable and based on the most up-to-date and trustworthy sources. However, the company does not take any responsibility for accuracy and completeness of the information, and the views expressed in the article may be subject to change without prior notice. 

Buy Moderna as COVID-19 Vaccine Shows Promising Result; Target Price $112 in a Best-Case Scenario

Moderna Inc, an American biotech company focused on drug discovery, announced that its experimental COVID-19 vaccine was safe and induced strong immune responses in all 45 healthy adult participants, sending its shares up over 15% in after-hours trading on Tuesday.

Participants who received two doses of vaccination had a much higher level of antibodies, exceeding the average seen in volunteers who recovered from the deadly virus. The biotechnology company said no-one experienced a serious side effect, but 54% of participants reported fatigue, chills, headache and myalgia.

So far, the coronavirus has infected over 13 million people and killed more than 571 thousand worldwide. Moderna started its phase-II trial in May and anticipates phase-III to start by the end of the month.

Executives’ comments

“These Phase 1 data demonstrate that vaccination with mRNA-1273 elicits a robust immune response across all dose levels and support the choice of 100 µg in a prime and boost regimen as the optimal dose for the Phase 3 study,” Tal Zaks, M.D., Ph.D., Chief Medical Officer of Moderna said in a press release.

“We look forward to beginning our Phase 3 study of mRNA-1273 this month to demonstrate our vaccine’s ability to significantly reduce the risk of COVID-19 disease.”

“These positive Phase 1 data are encouraging and represent an important step forward in the clinical development of mRNA-1273, our vaccine candidate against COVID-19, and we thank the NIH for their ongoing collaboration. The Moderna team continues to focus on starting our Phase 3 study this month and, if successful, filing a BLA,” Stéphane Bancel, Chief Executive Officer of Moderna said in a press release.

“We are committed to advancing the clinical development of mRNA-1273 as quickly and safely as possible while investing to scale up manufacturing so that we can help address this global health emergency.”

Moderna stock forecast

Thirteen analysts forecast the average price in 12 months at $86.46 with a high forecast of $112.00 and a low forecast of $60.00. The average price target represents a 15.22% increase from the last price of $75.04. From those 16, 14 analysts rated ‘Buy’, two rated ‘Hold’ and none rated ‘Sell’, according to Tipranks.

Morgan Stanley target price is $90 with a high of $279 under a bull scenario and $7 under the worst-case scenario. Jefferies rated Moderna as ‘Buy’ with a target price of $90. We second Morgan Stanley and Jefferies on Moderna stock outlook. We also think it is good to buy at the current level as 50-day Moving Average and 100-200-day MACD Oscillator signals a strong buying opportunity.

Analyst view

“We are Overweight Moderna. The company has taken an industrialized approach to develop mRNA based therapeutics and has rapidly generated a broad pipeline of 21 programs, 11 of which have entered clinical development. We believe Moderna’s mRNA drug development platform is more diversified and scalable compared with competitors and is validated through broad partnerships with Merck and AstraZeneca,” said Matthew Harrison, equity analyst at Morgan Stanley.

“The COVID-19 vaccine programs provide a significant acceleration of the path to commercialization and validation of the Moderna platform. We are positive on the early data and look forward to the progress. We see vaccines and rare diseases as the key valuation drivers of the company,” he added.

Upside and Downside Risks

Supporting clinical data across several modalities. Meeting timelines and continuing to expand a diversified pipeline. Launch vaccines in multiple indications including CMV and COVID-19, Morgan Stanley highlighted as upside risks to Moderna.

Efficacy and/or safety concerns cause investors to write-off subsequent readouts across additional modalities. Delays in Moderna’s ability to generate significant clinical data. Stronger than expected competitor data, Morgan Stanley highlighted as downside risks.