I’ve mentioned in the past that tech saved the economy. Letting people do things like work, shop, and even visit the doctor, all online, has made it possible to live with shutdowns and quarantines.
And now, tech is about to pull an encore and save an entirely new sector: tourism.
You see, tourism happens to be one industry that couldn’t just be moved online. Forbes was reporting losses close to $1 trillion, and 100 million threatened jobs, as far back as August.
A talk I had recently during my own vacation to Mexico really shed a light on the need for a high-tech solution. And, in this case, I’m talking about biotech
Oscar, the driver who picked us up at the airport, quickly brought the discussion around to the topic that seems to be on everyone’s mind in this tourist community – The Vaccines.
Because the tourist economy here depends on a healthy U.S., Oscar was very excited about the recent news of three COVID breakthroughs.
“When the United States get the flu,” Oscar said, “Mexico gets a heart attack.”
Oscar’s not the only one following the biotech breakthroughs. Millions of investors back home are looking for ways to cash in on it all.
Now then, I was actually surprised at how closely workers at our hotel were following the vaccine news.
That alone speaks volumes about how important these new compounds are for our physical health as well as that of the global economy.
It could very well be the most important development for 2021.
There’s just one problem facing retail investors. Trading off the headlines can be risky for your portfolio.
Negative news for any of these three vaccines that we expect to be out soon, could punish that stock and hurt others in the sector.
In a moment, I’ll show what is a great way to play not just the vaccine space but the entire biotech and drug sectors with a single, market-crushing stock.
But first, let me bring you up to speed on the three compounds closest to getting FDA approval.
On November 9, Pfizer announced that in preliminary data from a Phase 3 clinical trial, their COVID vaccine had shown “more than 90%” efficacy.
That’s biotech lingo for the vaccine preventing more than 90% of patients from getting COVID symptoms.
Exactly a week later, Moderna Inc. (MRNA), made its own announcement, saying its vaccine had a 94.5% efficacy.
Both breakthroughs come from a new bioscience technology known as mRNA. That’s short for messenger RNA. Yes, it’s very complex stuff. So, allow me to simplify.
A synthetic compound, mRNA is a molecule that tells cells to build proteins that can stimulate the immune system against diseases like COVID.
Make no mistake. This is a game-changer, not just for vaccines but for a whole new class of drugs that could use this process to target things like cancer.
We’re not just talking about the U.S. Earlier this week, Pfizer and Moderna sought approval from the European Union. The agency is expected to rule on at least one of them by the end of the month.
If approved as expected, the vaccines would cover roughly 448 million Europeans on top of roughly 330 Americans.
And on Wednesday we learned that the U.K. has given Pfizer the green light on an emergency use basis. The country has ordered 40 million doses.
Meanwhile, AstraZeneca PLC (AZN) also reported a COVID breakthrough. Working with Oxford University, the firm announced on November 23 that its vaccine had an efficacy of 70% to 90%, depending on the dosage.
This vaccine is very different from mRNA technology. AstraZeneca’s process involves taking a common cold virus isolated from chimpanzees and making it inactive. It works by altering a gene to express a protein that targets COVID.
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In any event, it looks like we’re going to have at least three vaccines in the “first wave” of vaccinations. And there are several more in the works, including one that relies on pills rather than injections.
Some may be slightly easier to transport, others may be cheaper to make.
But not all of the several dozen more in the works will receive FDA approval.
In a case like this, it’s difficult for retail investors to spot the winners from the losers and avoid overpaying for a “hot stock.”
And that challenge gets even harder when potentially amazing vaccine breakthroughs are made by companies still privately held, not even available on the public market.
The thing is, though. When it comes to breakthrough technology like a vaccine, a lot of the daring, innovative risk-taking is going to have to come from pre-IPO firms.
Retail investors can get involved in these kinds of ultra-dynamic plays more easily than ever before these days. You can see how in our special presentation right here.
But in the meantime, what we’re looking for is a way to play the whole space so we get all the upside without the risk of bad news affecting a single stock.
That’s why I continue to recommend Veeva Systems Inc. (VEEV), a provider of biotech-specific cloud services.
Fact is, it counts the three vaccine front runners – Pfizer, Moderna, and AstraZeneca – as clients. But Veeva doesn’t stop there.
In all, it serves roughly 600 other companies in the pharmaceutical and biotech sectors.
See, Veeva’s suite of cloud-based software tools helps companies deal with all the intricacies of working in biotech, not the least of which is keeping accurate records for FDA trials.
For example, Veeva’s cloud research platform helps companies set up research studies like the COVID vaccine ones. It also helps collect the data, and store it securely – all while making sure everything is compliant with strict regulations.
The firm’s cloud tools make sure everything is in one convenient location accessible across the enterprise. It means all test sites and researchers are always on the same page.
By storing all this data on Veeva’s platform, biotechs are automatically compliant with the required privacy regulations, and can easily hand over information to the FDA or other regulators.
Now you know why Veeva has so many all-star clients. It’s like owning a life sciences ETF – only much better. After all, Veeva boasts some terrific growth.
The firm has been expanding its earnings at 46% per year, a rate at which they will double in just 18 months.
So, while the vaccines are grabbing the headlines, Veeva is behind the scenes helping to make it all happen smoothly.
And that means we basically get a piece of the action in dozens of new vaccines and other drugs coming to market in the next few years.
Add it all up and you can see why this is a great way to keep your portfolio in good health for many years to come.
Cheers and good investing,
Michael A. Robinson