2 Popular But Overvalued Biotech Stocks to Avoid
Moderna (NASDAQ: MRNA) and BioNTech (NASDAQ: BNTX) have been hot stocks this year. Their share prices have enjoyed triple digit growth amid speculation stemming from their coronavirus vaccine programs. At the same time, as rumors swirl regarding the conclusions of each company's phase 3 clinical trials, investors everywhere are hunting for the best competitors in the rapidly expanding coronavirus market. Given that both Moderna and BioNTech have exhibited lightning-fast vaccine development, it's anyone's guess as to which has a better chance of winning the coronavirus vaccine race.
Unfortunately, this is a case where it pays to be cautious rather than greedy. While it's true that a successful vaccine would drive considerable revenue growth for each company, neither has much of a track record in drug development. Nor do they have any history of turning a profit, favorable fundamentals, or other products on the verge of commercialization that might justify the current prices. Savvy investors should probably steer clear of both companies -- and it's worth looking a bit closer at the details to understand why.
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Source Fool.com
