The S&P/ASX 200 Index (Index:^AXJO) is building on yesterday's gain as positive leads from overnight markets and optimism for a free COVID-19 vaccine lifts animal spirits.
The top 200 benchmark jumped 0.8% in early trade after notching up a 0.3% gain on Monday.
The upbeat mood is helped by the federal government's $1.7 billion commitment to provide two potential vaccines for all Australians.
Image source: Getty Images
Ready to use COVID-19 vaccine by January?
One of these vaccines could be ready for use in as little as five months, according to a report on Business Insider.
The Morrison government signed contracts with pharmaceutical companies to secure 85 million doses of two vaccines.
One of the deals is with AstraZeneca for their production of the University of Oxford vaccine. The other is for another vaccine being developed by the University of Queensland.
CSL in the frontline of COVID fight
If these treatments are proven to be safe and effective in clinical trials, they will be made in Melbourne at CSL Limited's (ASX: CSL) facilities.
This puts our largest ASX stock on the frontline of the pandemic. But don't get too excited. While CSL's topline will benefit from the contract to produce the vaccines, it won't be making much profit in this situation.
However, what it will gain in terms of reputation could be a worth more over the longer-term. CSL is already a household name, but it will become a national icon if it's linked to a successful COVID-19 treatment.
Australian could be first to be vaccinated
Our Prime Minister believes we could be among the first in the world to get vaccinated against the dreaded coronavirus, which infected close to 30 million people worldwide and claimed nearly 900,000 lives.
"Australians will gain free access to a COVID-19 vaccine in 2021 if trials prove successful," said Prime Minister Scott Morrison said in a statement released yesterday.
"There are no guarantees that these vaccines will prove successful, however the agreement puts Australia at the top of the queue, if our medical experts give the vaccines the green light."
$1.7 billion is a "cheap" gamble
There is a big "if" in the statement. Most drugs don't make it past Phase 3 trials, although there are promising signs for both these candidates.
The bottom line is that $1.7 billion is a cheap price to pay given that the cost of COVID-19 to the Australian economy is 100 times that and counting.
When will a COVID-19 vaccine be ready?
The University of Oxford vaccine is already in Phase 3 trials (final human trials) and is the most advanced candidate in the world – if you ignored Russia's claims.
This vaccine will be the first to be available if all the stars align, and so far, it's producing a strong immune response without any major safety concerns.
The University of Queensland's drug isn't far behind, and it too is showing good promise. This candidate is currently in Phase 1 trials and should be available from mid-2021 onwards if everything goes to plan.
Sadly, things seldom do in the world of drug development, or investing for that matter.
Fingers crossed fellow Fools!
