The vaccine race involves many runners, with the leaders being Moderna (NASDAQ: MRNA), Inovio (NASDAQ: INO), and Novavax (NASDAQ: NVAX). It feels like many vaccine companies are sprinting as they accelerate through the clinical timeline.

However, the US government raised the stakes on Thursday when they announced a $1.2 billion injection into AstraZene’s untried vaccine. It is basic economics, people respond to incentives. Hence, every biotech and their dog are developing potential COVID-19 treatments, vaccines and testing kits. Ultimately, allowing investors to score big but also be burnt off speculative COVID-19 companies.

While the US vaccine companies lead the pack, rising Chinese biotech, Cansino Biologics (XHKG: 6185) could are hot on their tail. Especially after they posted positive results in their phase 1 trial.

 

Chinese vaccine holds promising potential

In a nutshell, Cansino took a common cold virus, disabled its ability to replicate, and added the coronavirus. Thus, the vaccine aims to give our immune systems a taste of COVID-19, so if we contract it, we can kill it.

Cansino Biologics’, in a phase 1 trial, tested their experimental vaccine in 108 healthy adults in China. The biotech injected small, medium, and large dose quantities within the candidates. After two weeks, the results of the trial demonstrated no serious side effects. However, a fevers were common.

Also, the phase 1 trial highlighted how the vaccine triggered an immune response. The vaccine only allowed patients to develop neutralising antibodies that could attach to the virus but not eliminate it. Also, scientists are unsure if the vaccine could produce enough antibodies to protect people from the virus. Co-author Professor Wei Chen from the Beijing Institute of Biotechnology said, “These results represent an important milestone”.

The Canadian Center for Vaccinology will soon be trialing Cansino’s COVID-19 vaccine in the coming months. Further, adding weight to Cansino’s positive trial results.

However, investors must understand that Phase 1 trials aim to show the drug’s safety  as opposed to its efficacy. Testing safety is a relatively easy hurdle. Thus, Cansino’s results might is a step in the right direction, but they  have a long clinical path ahead.

Is Casino another vaccine loose end?

Before I start, I am obliged to remind our viewers that this is not advice only general commentary from my extensive research in this area.

Cansino, like every other vaccine company, will receive criticism from investors that the biotech is too risky. Hence, not worth investing in. I agree with the criticism as a long-term investment. Because predicting the long-term success of a COVID-19 vaccine is extremely difficult. Especially, as producing positive results in phase 2 & 3 trials, in a matter of months is no easy feet.

Despite the criticisms of “it is on early stages” Cansino’s phase 1 results warranted a phase 2 trial. Looking at the surge following positive phase 1 results, investors should expect the same if not more for a successful phase 2. I would wait for a sell-off before investing. Because Cansino is currently the second most overbought stock in Hongkong right now.

Overall,  I would keep a close eye on Cansino, especially the updates from Canada, and  ride the wave of phase 2 results. (opinion not advice).

The likelihood of a vaccine is low. Whereas chance of COVID-19 treatments is much higher. Thus, I would err investors to explore treatment companies like Pluristem (NASDAQ: PSTI) and Mesoblast (ASX: MSB, NASDAQ: MESO). 

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The information above is not financial advice. Youth Investment Group has no liability for personal financial interests or investment decisions. You should make your own investment decisions based upon your own research and what you believe is best for you.

Written by Patrick McLoughlin, Senior Manager of YIG.

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