Smart Investors Are Watching This Trend Right Now

Key Points

Regeneron, Eli Lilly, and Vir Biotechnology may benefit from this trend.

Investors who bet on the right coronavirus vaccine stocks a year ago quickly reaped rewards. And I think there will be more to come. Governments are placing future orders. That makes revenue — and in some cases, profit — recurrent. A perfect reason for the share prices to move higher. But vaccine stocks probably won’t be the only area in the coronavirus space to generate great returns for investors.

Another coronavirus investing trend has arrived. And like vaccines, it may be long-lasting. Let’s take a close look at the area smart investors are watching right now. Image source: Getty Images. Regeneron, Lilly, and Vir

I’m talking about coronavirus treatment stocks. First, monoclonal antibody treatments. The U.S. Food and Drug Administration has authorized such treatments by Regeneron ( NASDAQ:REGN ), Eli Lilly ( NYSE:LLY ), and Vir Biotechnology ( NASDAQ:VIR ). In fact, it gave the nod to Regeneron and Lilly late last year. So, these therapies aren’t exactly new to the market.

However, they got a bit of a rough start. At the time, all of these treatments required infusion. (Regeneron’s treatment now can be administered subcutaneously as well.) In some cases, healthcare facilities didn’t have the resources to set up special infusion centers. And in other cases, potential patients didn’t feel sick enough to go for treatment.

There are a few reasons why that’s no longer the situation. First, researchers have collected more and more data on the effectiveness of antibody treatments. At the same time, the delta variant emerged. It’s so highly transmissible that it’s even caused breakthrough infections in fully vaccinated individuals. And that has prompted more and more people to opt for antibody treatments.

The government hasn’t ignored any of this. States hard hit by COVID-19 like Florida and Texas have been opening more infusion centers. And orders of antibody treatments during August surged by 1,200%, ABC News reported, citing the Department of Health and Human Services. 800,000 doses shipped

At the same time, President Biden’s new initiative to fight the pandemic specifically includes increasing use of these treatments. Biden said last week that the country would up the weekly number of antibody shipments to states by 50%. The government shipped more than 800,000 doses over the past two months, according to CNBC.

Regeneron already generated $2.59 billion in antibody treatment sales in the second quarter after fulfilling a contract with the U.S. government. And the company just announced a new government contract worth more than $2.9 billion. Regeneron will supply 1.4 million doses to the U.S. through January. This brings the total order from the U.S. to about 3 million doses so far. I don’t expect the orders to end here, but clearly the size of the orders will depend on coronavirus case numbers.

Regeneron dominates the U.S. COVID-19 antibody market. Lilly and Vir are smaller players; here’s why. Regulators say Lilly’s product isn’t efficacious against certain variants — so use is only permitted in states where […]

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