This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

Sometimes investing in stocks is simple. Find the best companies and buy shares whenever Wall Street turns negative on them. It can seem counterintuitive. How can the stocks with the best historical performance still produce great future returns? But winners keep winning.

Take Amazon.com (NASDAQ: AMZN) as an example. The stock has returned 167,900% since its initial public offering and 1,530% just in the past decade -- after many thought its best days were behind it. Despite those gains in the rearview mirror, I just bought shares. New leadership, a transformational business unit, and a fair valuation all point to one of the easiest decisions I've made as an investor.

Changing of the guard

Yes, Jeff Bezos is brilliant. He is the mastermind behind the Amazon we know today. His legend will live long after he departs this earth -- be it by spaceship or other means. But by all accounts, he wasn't the same laser-focused leader in the past couple of years as the man who built the everything store into one of the most celebrated -- and feared -- companies on earth. 

Amazon's new CEO, Andy Jassy, has been described as more even-keeled and soft-spoken than Bezos. Despite the personality differences, it has been said his focus on details is truly unique. He joined Amazon shortly after graduating from Harvard Business School and has led Amazon Web Services (AWS) since the cloud computing unit was formed in 2003. He's grown it into more than half of the company's operating profit. AWS has posted $52.7 billion in revenue over the past 12 months.  That would make it the 61st largest company by sales in the U.S. if it were a stand-alone company. That's reason number two.

Amazon Web Services

Understandably, hearing the name Amazon.com elicits visions of frictionless ordering, delivery vans, and brown boxes on your doorstep. But investors know the profit engine of the company is its powerful cloud computing unit. Amazon developed an expertise in operating its massive computer infrastructure thanks to its retail operations and launched AWS as a way to bring that expertise to other companies. 

It's completely transformed corporate computing. What used to require massive investment in servers, technical staff and real estate can now be leased from Amazon by the minute. The company has more than 200 services available through its cloud infrastructure like creating and managing databases, analytics, accessing virtual servers, artificial intelligence, and security. A new company can now launch and run their business through AWS at a fraction of what it would have cost during the dotcom boom. Startups like AirBnB, Slack, and Lyft are proof.

That's not to say it's only for small fast-growing companies. Some of its biggest customers are old-school multinational corporations like General Electric, Johnson & Johnson, and Disney's ESPN. In the most recent quarter, Amazon announced Ferrari among its recent deals. 

The unit continues to grow. It is opening new regions to increase availability of the AWS services across the globe. In fact, it isn't just growing, it's accelerating. AWS revenue has grown faster in each of the past two quarters. That performance, and what it could mean for the long term, is one of the reasons I'm adding shares now.

Data source: Amazon; YoY=year-over-year.

The valuation is fair

Like most great companies, Amazon stock has rarely been cheap. Over the years it has only traded below 24 times operating cash flow during times of relative market panic. And those can't be predicted. 

AMZN data by YCharts

After its second quarter earnings were released, the stock has fallen almost 9%. The company's quarterly sales and forecast fell short of Wall Street's projections. Currently, the average estimate from analysts is for $490.3 billion in revenue for the full year. Despite last quarter's hiccup, the past few years can be used to project the normal rate of operating cash flow.

Data source: Amazon.

Using the pre-pandemic 13.7% in 2019 as a guide, the stock's $1.67 trillion market cap is roughly 24.8 times normalized operating cash flow for 2021. That would be right in line with historically good times to buy shares. With the ultra-profitable AWS becoming a larger part of the business, the cash flow as a percentage of revenue is likely to keep climbing in the years ahead. It's just one more reason I was happy to add shares of Amazon to my portfolio.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

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Jason Hawthorne owns shares of Amazon. John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended Airbnb, Inc., Amazon, and Walt Disney. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended Johnson & Johnson and has recommended the following options: long January 2022 $1,920 calls on Amazon and short January 2022 $1,940 calls on Amazon. The Motley Fool Australia has recommended Amazon and Walt Disney. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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Charlie Munger has called Robinhood (NASDAQ: HOOD) a "gambling parlor masquerading as a respectable business." Its founders have argued that they are democratizing finance for the next generation of investors. Whichever side of the debate you fall on, most agree the trading app is shaking up the retail investing landscape. 

Amid the barbs and headlines, its initial public offering (IPO) has revealed many numbers that inform the debate. Here are three that would cause me to think twice before buying shares.

1. More than 50% of customers are first-time investors

This number might be the best argument in favor of Robinhood as a democratizer. If half of its customers are investing for the first time, then the company should be applauded for improving access to the investment world. In fact, there are a few other numbers to bolster that case. The average account size is about $3,500. Compare that to the average account size for E*Trade ($100,000) and Charles Schwab (NYSE: SCHW) ($240,000), and it looks like people who might not have traditionally invested in the stock market are getting involved. 

Dig a little deeper, and there are some flaws in the argument. The median account -- the one with the same number of accounts larger and smaller -- is only $240. And they appear to be much more active than at other brokerages. In the first quarter of 2021, Robinhood users made 60% more trades on average than those at Schwab. That disparity is magnified if you normalize for account size. There's a reason for that: The company gets paid handsomely for all of that activity. In its first quarter, 81% of revenue came from selling those orders -- called payment for order flow (PFOF). 

While almost all online brokerages do it, Robinhood makes almost 100 times more per dollar in the average customer account than Schwab, according to a report by Alphacution Research Conservatory. None of the likely reasons are good for inexperienced investors. First, users are more prone to trading risky instruments like options contracts and cryptocurrency.

The same report shows almost 90 times the number of options contracts traded for each dollar in the customer account compared to Schwab. The company's own filings show its dependence on cryptocurrency (more on that in a bit) while Schwab, E*Trade, and TD Ameritrade don't even offer it. Those orders are worth more to market makers than simple stock trades.

Second, inexperienced investors might be easier to take advantage of during market volatility. Lastly, those accounts could generate so much money because they trade more. Robinhood uses gamification (elements of game playing) to increase user engagement and prompt more transactions. It's the same way a slot machine is designed to keep patrons pulling the handle. And like the one-armed bandit, people who do it a lot tend to lose in the end.

A recent study by academics at several California universities and the University of Washington showed stocks that are extremely active on Robinhood experience a price spike and then a sharp reversal -- a classic sign of speculation. A different study by academics at the Sao Paulo School of Economics and the University of Sao Paulo examined 1,600 Brazilian day traders. It found that only 1% of them made more than minimum wage. The app's most important role might end up being to teach a new generation of investors what not to do.

2. Seventeen percent of revenue is generated from cryptocurrency

In its IPO filing, Robinhood stated that 17% of its Q1 revenue this year was derived from cryptocurrency trading. That's up from just 4% last year. Notably, more than one-third of that was related to Dogecoin (CRYPTO: DOGE). Doing the math, that means 6% of the company's entire revenue was the result of an asset that traded for one-fifth of $0.01 less than a year ago. In total, crypto assets traded on Robinhood grew 24-fold year over year to $11.6 billion.

It's amazing growth but hardly sustainable. Over that 12-month period, the price of Bitcoin (CRYPTO: BTC), Ethereum (CRYPTO: ETH), and Dogecoin climbed 490%, 1,820%, and 10,800%, respectively. Cryptocurrency remained volatile in the second quarter, so the company's next earnings report might convince Wall Street that the company can keep it up. But crypto volumes reportedly fell 43% in June. Without continued asset appreciation and trading activity, it's hard to see this large chunk of the company's revenue persisting.

3. The company recently paid $70 million in fines 

The penalty was a settlement with the Financial Industry Regulatory Authority (FINRA) for providing false and misleading information to its customers, as well as allowing them to partake in especially risky trading behaviors. Other charges included failing to tell customers how it made money and not obtaining best-price execution for their orders. The fines haven't dented its ambitions.

Co-founder Vlad Tenev has said the company is considering offering retirement accounts and sees evidence that the majority of its customers practice a buy-and-hold investing strategy. It's hard to make that case with the data that has been made public. It is a natural next step for Robinhood, but it might entice people to bring more of their money into the proverbial casino. It's one thing to actively trade with $240; retirement accounts are a different story. After the previous fines and current review of PFOF by the Securities and Exchange Commission (SEC), I wouldn't expect to see a Robinhood IRA anytime soon.

There are two sides to every story

Despite the red flags, the company has done some good. It is largely responsible for the industry adopting $0 trades, and it's hard to argue that it hasn't opened investing up to more people, especially people who might never have invested before. For that, it deserves praise. It even sold about 25% of its IPO shares to its own customers. But like so many other numbers, they can be interpreted in different ways. 

The company went public at the low end of its projected price range and was reportedly having trouble getting institutional investors to buy shares. The two founders each sold nearly $50 million worth. Although together they continue to own about 16% of the company, inexperienced investors might get the short end of the stick buying shares that much of Wall Street passed on. Deciding to invest in a company is a personal decision, and there are a lot of different reasons to choose one over another. These numbers are three reasons that keep me from making a bet on Robinhood.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

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Jason Hawthorne has no position in any of the stocks mentioned. Charles Schwab is an advertising partner of The Ascent, a Motley Fool company. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended Bitcoin and Ethereum. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended Charles Schwab. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

1. Different companies from the beginning

2. What gets prioritized gets done

3. Wall Street shows one more love

MRNA PS Ratio data by YCharts

Data Sources: Moderna, BioNTech.

The tiebreaker

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

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Jason Hawthorne owns shares of BioNTech SE. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended Moderna Inc. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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Pharmaceuticals leads the way

Medical devices could add a spark

Consumer health is an anchor

The sum of the parts

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

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Jason Hawthorne owns shares of Intuitive Surgical. Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Teresa Kersten, an employee of LinkedIn, a Microsoft subsidiary, is a member of The Motley Fool’s board of directors. Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to its CEO, Mark Zuckerberg, is a member of The Motley Fool’s board of directors. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended Alphabet (A shares), Alphabet (C shares), Apple, Facebook, and Microsoft. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended Johnson & Johnson and has recommended the following options: long March 2023 $120 calls on Apple and short March 2023 $130 calls on Apple. The Motley Fool Australia has recommended Alphabet (A shares), Alphabet (C shares), Apple, and Facebook. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

As an investor, it's hard not to focus on the incredible revenue generated by COVID-19 vaccine makers like BioNTech (NASDAQ: BNTX). They have taken a new technology and turned it into one of the best selling drugs of all time. This year could be just the beginning.

After years of scientific research, the age of genetic medicine might have finally arrived. That's great news for BioNTech shareholders. They could see decades of gains ahead. Ironically, the vaccine could now be the biggest threat to those gains in the short term. It's turning out that the vaccine might just work too well.

1. Comirnaty: The COVID-19 Vaccine

Any discussion of BioNTech has to begin with the COVID-19 vaccine it developed with partner Pfizer (NYSE: PFE). As of May 6, more than 450 million doses of the drug had been provided across 91 countries. Combining all COVID vaccine producers, the U.S. is administering about 875,000 doses each day. That number is more than 45 million globally.

The partners already have orders for 1.8 billion doses this year and expect the total capacity for production to reach 3 billion by the end of 2021 (and even more in 2022). Based on the firm orders as of May, BioNTech management was expecting revenue of 12.4 billion euros. Extrapolating that number to the full allotment of doses would bring in more than $20 billion in sales. It's amazing for a product that didn't exist a year ago. However, for the company's $27 billion market cap to hold up over time, it will likely have to bring other drugs to market. On that, it's making progress.

2. A head start in a new era of medicine

With the success of its mRNA-based vaccine, BioNTech and Moderna (NASDAQ: MRNA) have established themselves as early leaders in a revolutionary new biotechnology. For its part, BioNTech has 14 drug candidates in 15 clinical trials. It was originally founded to beat cancer, and the company has several oncology programs going into phase 2 trials this year.

Its skin cancer treatment -- with partner Regeneron -- dosed its first phase 2 patient in mid-June. Its head and neck cancer treatment, combined with Merck's Keytruda, should dose its first phase 2 patient in the coming weeks. Phase 2 for BioNTech's individualized colon cancer treatment will start later this year. In that treatment, a patient's specific tumor mutations -- or neoantigens -- are used to develop a targeted therapy. The number of programs the company is pursuing speaks to the ambition it has for the future of mRNA.

3. Leadership has serious skin in the game

Amid the flurry of executive stock sales in 2020, when shares of companies benefiting from the pandemic skyrocketed, one man stood firm. Ugur Sahin, co-founder and CEO of BioNTech, never sold a single share. It fits his personality. He reportedly doesn't own a car, bikes to work, and continues to live in a modest apartment. 

Filings show Sahin controls 17% of the company worth approximately $9.4 billion. Although there is nothing onerous with their actions, the leaders at Pfizer and Moderna pocketed a combined hundreds of millions of dollars in sales through 2020. A CEO who sells stock isn't necessarily a reason to be concerned. But a CEO with most of his personal wealth aligned with shareholders is definitely a good sign.

The vaccines might be too good

Until now, most had been operating under the assumption that COVID protection would mean getting a booster shot each year  -- like the flu. But the SARS-CoV-2 virus doesn't mutate as fast as your typical influenza bug. And it is looking like our bodies defenses, through inoculation of having had the illness, might be long-lasting.

A just-published peer-reviewed study indicated the protection offered by the mRNA vaccines could last for years, making the need for booster shots unnecessary. That doesn't apply to the Johnson & Johnson jab. The lack of enduring protection from that drug will create some incremental demand for both BioNTech and Moderna's shot. The study didn't account for the delta variant. It's possible that could complicate the study's conclusion.

The news makes it even more imperative that BioNTech comes up with a second act soon. Sahin has said it could launch multiple products in the next five years. It certainly has the ingredients: a full pipeline, the proven scientific acumen, and dedicated leadership. But much of the current valuation may be counting on vaccine demand persisting for a few years. If that falls off, it could be a bumpy ride for shareholders while they wait for an encore. 

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

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Jason Hawthorne owns shares of BioNTech SE. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended Johnson & Johnson and Moderna Inc. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

With the advances in both software and hardware, investors are recognizing that every company is a technology company. Rather than a back office function supporting a few productivity tools, technology has become a differentiator in industries that may seem to have little to do with software and semiconductors.

In the biotech industry, Moderna (NASDAQ: MRNA) recognized this from the start. It was founded in 2010 with an eye on tech-enabled speed as its killer app. The company leveraged the foresight during the pandemic to deliver a COVID vaccine in less than a year. Looking toward the future, management continues to highlight how technology will be the driving force behind its success as a new kind of drug developer.

Set up for success

In its initial 2018 filing to go public, Moderna's ambition was to become a platform for drug development. That's different from most biotechs that raise money to tackle a particular disease. The company even built its Norwood, Massachusetts facility in 2018 as a fully integrated, digital facility capable of every process that converts raw materials into finished vials for an administration site. Thanks to manufacturing automation, management estimates 10 million doses per year could be manufactured there. 

Building the company as tech-focused from the start fed the company's six digital building blocks: cloud, integrated processes, internet of things, automation, analytics, and artificial intelligence (AI). These allow it to bring complex data sets together in easy-to-use interfaces. That helps researchers improve decision making, predict potential hurdles, and quickly scale what they learned.

Leveraging the advantage

If the proof is in the results, Moderna's speak for themselves. The biotech took only 42 day from sequencing the SARS-C0V-2 genome to shipping a drug for the phase 1 trial. However, the Moderna COVID-19 vaccine isn't the only drug benefiting from the company's use of technology. 

For its personalized cancer vaccine (PCV), it is able to take a biopsy, sequence the tumor's genome, then design, manufacture, and administer the drug all in a few weeks. Since 2018, the speed of this process has come down 40% while the cost has dropped 65%. Similarly, the cost to produce its vaccine for cytomegalovirus has fallen 69% since 2019. 

Yet another application is Moderna's use of AI. The company is able to predict virus mutations -- like those in SARS-CoV-2 -- as well as model the behavior of proteins and enzymes. This essentially accelerates the process of evolution so researchers can select appropriate candidates for further development. Again, this streamlines steps and accelerates the process.

A framework for the future

CEO Stephan Bancel wants to see those types of examples in everything Moderna does. Citing pockets of AI expertise surrounded by leaders who have never used it, the company is establishing an AI academy. The goal is to leverage the technology to accelerate learning throughout the entire enterprise. It's part of the Bancel's commitment to reinvest profits from the COVID vaccine back into the business. Traditional drugmakers should take note.

In the first quarter of 2021, spending on research and development was up four times what it was in the same period a year ago. The spending on digital, automation, and AI is projected to be $170 million. That's almost three times what it was last year and more than six times what it was in 2019. Bancel is taking advantage of the COVID windfall to extend the company's technological advantages into areas like clinical trial operations and adverse event analysis. With $8.2 billion of cash on the balance sheet at the end of March, and agreements for hundreds of millions of doses of its COVID vaccine stretching out years, Moderna has a lot of ammunition.

In 2020, the company's technology advantage shone bright. As it invests more to accelerate automation and AI, the gap between its scientific productivity and traditional drug developers is set to expand. From the beginning, Stephan Bancel seemed to know what Moderna's secret weapon would be, and now he's reloading.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

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Jason Hawthorne has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended Moderna Inc. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

Beyond the incredible run in technology stocks and the head-scratching success of meme stocks, the appreciation of cryptocurrencies will be one of the signature stories when market historians look back on the pandemic. With opinions polarized about the concept itself, debating it doesn't often change minds. 

Instead, let's take a look at Bitcoin (CRYPTO: BTC) and Ethereum (CRYPTO: ETH), the two most prominent digital assets, to determine which is the better buy right now. Despite the similarities, some key differences set one apart.

Serving different purposes

The first thing to note when comparing Bitcoin and Ethereum is that they aren't actually both cryptocurrencies. At this point, most people are familiar with Bitcoin, which was launched in 2009 by the mysterious person or group called Satoshi Nakamoto. Its purpose was to make transactions anonymous and eliminate the need for a trusted third party to secure payments across a network.

Although Ethereum is referred to as a cryptocurrency, it is actually the network itself. Ether is the actual currency used to purchase goods and services on the Ethereum network. Although the names are used interchangeably, the difference is important. The network lets users create their own applications and establish "smart" contracts that automatically enforce the terms. More on that in a bit.

To the moon

The price of both Bitcoin and Ether have leapt over the past year, up 335% and 1,460%, respectively. Over the last month, they've gone in opposite directions.

Bitcoin Price data by YCharts

Most are familiar with Elon Musk and Jack Dorsey's support of Bitcoin, but some well-known figures like Gweneth Paltrow and Snoop Dogg are also longtime fans. Unfortunately, celebrity endorsements aren't always what they seem. In 2017, the Securities Exchange Commission (SEC) ruled that many promoting cryptocurrencies may be doing so illegally, failing to disclose the fact they are being paid for it. That mostly applied to obscure coins trying to gain traction, but it does raise an important issue.

Ethereum lacks both celebrity endorsements and the mysterious beginnings of Bitcoin. Instead, it has a relatively transparent history. Vitalik Buterin was born in Russia and raised in Toronto. In 2004, at the age of 20, he was awarded the Thiel Fellowship. Named after Peter Thiel of Paypal and Palantir Technologies fame, the award goes to young people to enable them to pursue interests other than attending college. A year later he co-founded what morphed into the Ethereum network. Earlier this month he became the world's youngest crypto billionaire.

Imagining the future

Aside from the hype and speculation, there are legitimate reasons some decentralized digital currency could take hold in the future. Cryptocurrencies offer networks for transactions that could eliminate the friction of financial middlemen. In the simplest example, getting rid of brokerage fees and commissions in large transactions provides a strong incentive for an alternative payment system. 

Further, programmable contracts would also cut out layers of complexity and uncertainty. Imagine purchasing a ticket to an outdoor event that automatically issues a refund when weather data shows the event will be cancelled. Of course, Ethereum's vision is broader. The ultimate goal is to create a decentralized internet, running on many small computers around the globe, rather than relying on third parties like Microsoft and Alphabet's Google.

One problem with the adoption of either asset is price volatility. Although Ether has outperformed recently, historically it has had longer and steeper drawdowns when sentiment turns on the crypto market. 

Bitcoin Price data by YCharts

Although proponents often tout anonymity and security as features, the truth is more complicated. Both currencies offer pseudonymity. That means all transactions are stored on the blockchain with a crypto address of the transacting party, not a name. It's similar to writing a book under a different name. As long as no one knows who owns the address, the transaction is in effect anonymous. However, if the owner of the address does become known, the entire financial history of that person is available to everyone on the network.

To avoid this risk, the original Bitcoin white paper suggests using a different address for every transaction. As far as security, the Bitcoin protocol itself may be secure, but the online wallets that store keys, as well as various sites and services, may offer no such protection. There have been numerous breaches related to both Bitcoin and Ether in the past few years: See here and here.

Choosing one

It's hard to choose a potential replacement for government-backed currency, but as with investing in biotech stocks or trying to cure cancer, it's probably best to diversify across a few that seem to have potential. That said, there are three characteristics that have me leaning toward Ethereum.

The first is the support of developers. A recent report showed that in the third quarter of 2020, an average of nearly 2,300 developers per month was working on Ethereum. That number was slightly less than 400 for Bitcoin. Second, the interest (and promotion) of celebrities makes it difficult to determine which incentives are really driving activity around the largest cryptocurrency. In other words, are people actually using Bitcoin, or are they just getting paid to talk about it? Finally, price appreciation. Although the recent drop in prices has affected all crypto assets, this is clearly a market driven by speculation. In such cases, choosing the asset with the most momentum always seems like the better bet. In this case, that's Ethereum.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

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Coming into 2020, Moderna Inc (NASDAQ: MRNA) was a $6.5 billion biotech with the goal of using messenger RNA (mRNA) -- the molecule that tells cells what proteins to make -- to fight and prevent disease. Not much was known about the company's technology or even the diseases its drugs would target, but that changed in 2020 as the company became one of the leaders in the fight against COVID-19. 

A breakout year

Moderna's stock rose 434% during 2020, but that number doesn't capture how eventful the year was, or the ups and downs shareholders experienced. After receiving funding from the Coalition for Epidemic Preparedness Innovations in late January, the company worked with the National Institute of Allergy and Infectious Diseases to deliver a COVID-19 vaccine candidate a month later.

Positive phase 1 data were released in mid-May, and management promptly raised $1.34 billion through a secondary share offering. On 30 November, the company provided analysis from phase 3 data showing its vaccine was 94.1% effective at preventing COVID-19. Three weeks later, on 18 December, the Food and Drug Administration (FDA) granted emergency use authorization (EUA). 

Although the stock's rise has been tremendous, its overall uneven progress offers a lesson in perseverance for shareholders. While everyone would welcome a more than 400% rise in a stock, holders had to endure a 25% sell-off (or more) four different times.

MRNA data by YCharts

Looking ahead, the company is well positioned for the future. Moderna had $3.3 billion in cash and investments on its balance sheet as of 30 September and recently increased the number of COVID-19 vaccine doses it expects to make in 2021 from 500 million to 600 million. The company has already supplied 18 million of an agreed-upon 200 million doses to the US Government and has additional deals with Canada, Israel, South Korea, and the European Commission, among other recipients . Despite this good news already priced into shares, the company has said it could produce as many as a billion doses this year. If so, last year's gains in the share price could continue through 2021.

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Jason Hawthorne has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

In late 2018, Moderna Inc (NASDAQ: MRNA) went public in the largest biotech initial public offering (IPO) in history. Its value barely moved until mid-February 2020, when COVID-19 cases in the U.S. started showing up in multiple states. Now that its coronavirus vaccine has received Emergency Use Authorization, some investors might think there is limited upside left in the stock. That thinking might lead shareholders of Moderna to do the worst thing they could do right now.

Warp speed and beyond

Working with the National Institute of Allergy and Infectious Diseases, the company delivered a vaccine just 42 days after the genome sequence of the novel coronavirus was made public. Since then, the U.S. government has provided $4.1 billion to the company to get the drug to market, and will purchase 200 million doses of the vaccine with an option to buy 300 million more. Management's base case is for 600 million of the doses to be available by the end of 2021.

Much has been made about using mRNA for its vaccine, but patented fat molecules that deliver the genetic instructions to the cell are also part of the secret sauce. Without these, a strong response from the immune system would destroy both carrier and cargo. On a December investor conference call, CEO Stephane Bancel referenced the 20 products in the company's pipeline using this approach, asserting capital had been a limiting factor in the past. Now, with $4 billion of cash on the balance sheet, he expects more successful launches such as the potential for $2 billion to $5 billion in sales from the company's cytomegalovirus vaccine, which is currently in a phase 2 trial. 

Selling the stock now that one drug is authorized may lock in a profit, but Moderna's most valuable asset could be its platform for drug development. If so, it will take years to play out. Shareholders who sell now could be giving up on the company just as it's starting to revolutionize how diseases are treated.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

The post The worst mistake Moderna investors can make right now appeared first on The Motley Fool Australia.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

More reading

• 3 Vanguard ETFs I would recommend to friends
• Does Macquarie rate Life360 shares a buy, hold or sell?
• Why I'd buy and hold these ASX 200 blue-chip shares for at least 5 years
• I'd buy BHP and these ASX 200 shares with $5,000 in May
• How to tap into Asia's growth using ASX ETFs

Jason Hawthorne has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

In the last three weeks, the world has let out a collective sigh of relief on positive news from coronavirus vaccine trials reported by Pfizer (NYSE: PFE) and partner BioNTech (NASDAQ: BNTX), Moderna (NASDAQ: MRNA), and AstraZeneca (NASDAQ: AZN). But while the market cheered more than 90% efficacy of the first two vaccine candidates, the results from AstraZeneca's clinical trials were met with more of a shrug. Despite the market's reaction, I think investors have more to be excited about from the potential AstraZeneca vaccine than its efficacy data suggests. 

When effectiveness isn't really effectiveness

With so many vaccines under development – the New York Times' Coronavirus Vaccine Tracker lists 74 in clinical trials or approved for limited use – it can be difficult to understand what might make any one vaccine better than the others. One clear way is knowing how effective they are at preventing the disease. But as it turns out, even that can be a little misleading.

AstraZeneca and the University of Oxford's recent announcement that their vaccine candidate had 70% overall effectiveness at preventing COVID-19 requires a little more digging. This number was generated from two arms of the vaccine trial, one that received two full doses of the vaccine a month apart, and one that initially received only a half dose. When reviewing each arm separately, it's clear the cohort who received only half a dose initially demonstrated 90% effectiveness. That's not too different from Moderna and Pfizer's candidates, which showed 94.5% and 95% efficacy, respectively. 

Although the difference in efficacy could disappear with more data collection, researchers have at least two theories about why a smaller initial dose might have led to better prevention rates. First, the lower initial dose of the vaccine might just do a better job at stimulating the immune cells that create antibodies. Another theory is that the vaccine triggers an immune response to both SARS-CoV-2 and the adenovirus used to deliver the vaccine into cells. If the vaccine causes a response to the very virus used to deliver it, cutting the initial dose in half could actually allow more of the vaccine to make it into cells. This explanation is also supported by non-COVID-19 research in mice, in which a lower initial dose of a vaccine better established the memory immune cells needed when the second dose was delivered.

Why effectiveness is not the most important factor

So far the vaccines that have reported results have shown remarkable effectiveness. After all, even the arm of the AstraZeneca trial that showed poorer results demonstrated 62% effectiveness – better than most years' versions of the flu vaccine, which range from 40% to 60% efficacy. Once you have a vaccine that is reasonably effective, other factors contribute much more to how many people end up getting vaccinated, and whether a disease can be eventually slowed or even stopped. 

How easy a drug is to manufacture and distribute, whether it causes side effects, and how it affects different groups of people are all considerations that can leave a scientific marvel stuck in the lab – or turn a drug that breaks no new ground into a widely adopted standard. Unlike the gene-based vaccines from the Pfizer-BioNTech partnership or Moderna, the AstraZeneca vaccine relies on the chimpanzee adenovirus. The former two vaccines are based on synthetic messenger RNA (mRNA) technology that has never once been used in an FDA-approved drug. The use of chimpanzee adenovirus by AstraZeneca was first published in 1984 and is now widely used as a way to deliver medicines. 

Another key element is transmission. While neither the Pfizer nor the Moderna vaccine was evaluated for the ability to limit transmission – only those with symptoms were tested – participants in the AstraZeneca trial routinely swabbed themselves whether they had symptoms or not. The data collected leads researchers to believe that the vaccine does indeed prevent transmission of COVID-19, even from those who are not showing any symptoms. Furthermore, not only did the vaccine protect people of all ages, it generated the same amount of antibodies in participants whether they were young or old – a great sign, because the disease often takes its most severe toll on the elderly. AstraZeneca also reported no serious illnesses in the 23,000 trial participants. 

The logistical challenges of manufacturing and transporting millions of doses of a vaccine might end up being the difference between a cool scientific breakthrough and ending the pandemic. While Pfizer's vaccine must be stored at negative 94 degrees Fahrenheit – requiring a special case and dry ice to be transported – the AstraZeneca vaccine can be stored at normal refrigeration temperatures. This is even an advantage over the Moderna vaccine, which can be housed for a month at normal refrigeration temperatures but requires negative 4 degrees Fahrenheit for longer storage. Most countries either do not have the "cold-chain" capabilities to store these vaccines for very long, or their capacity is extremely limited.

The most important reasons to be excited

It may seem like all of these reasons are enough to be excited about the AstraZeneca vaccine, but I haven't even gotten to the best parts: cost and production. While Pfizer and Moderna have agreements in place for vaccines in the range of $20 to $40 per dose, AstraZeneca has pledged not to make a profit during the pandemic. Its price, around $2.50 per dose, coupled with the less-stringent refrigeration requirements, will make vaccination much easier in countries without a wide social safety net or relatively rich population. That may not seem as important if you are sitting in front of a computer in the Western world, but in the words of one public health expert at the University of Oxford, "no one is safe until everyone is safe."

Unlike Pfizer and Moderna, which together think they will produce enough doses for 20 million people by the end of the year, AstraZeneca plans to have 200 million doses ready by the end of 2020, 700 million by the end of the March 2021, and as many as 3 billion doses through next year. Of all the reasons to be excited about the AstraZeneca vaccine, this is my absolute favorite: production. This rate will be enough to more than satisfy the big pharma company's agreement with the US for 300 million doses and Europe for 400 million. It isn't clear how many doses will initially be available for Europe and the US, but ending the pandemic will mean getting a vaccine to as many people as possible. From what I can tell, AstraZeneca just took the largest leap toward that goal, despite the lackluster market reaction.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

The post Why AstraZeneca's potential vaccine is more exciting than you think appeared first on The Motley Fool Australia.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

More reading

• 3 Vanguard ETFs I would recommend to friends
• Does Macquarie rate Life360 shares a buy, hold or sell?
• Why I'd buy and hold these ASX 200 blue-chip shares for at least 5 years
• I'd buy BHP and these ASX 200 shares with $5,000 in May
• How to tap into Asia's growth using ASX ETFs

Jason Hawthorne has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.