Virus Outbreak Fuels Volatility in Some Biotech Stocks - The Wall Street Journal

Alexander Osipovich

The Wall Street Journal

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Updated Jan. 22, 2020 4:43 pm ET

The deadly coronavirus outbreak is sparking big moves among biotechnology stocks, a volatile sector where companies can flourish or struggle depending on their progress in developing new medical treatments.

Shares of Moderna Inc., a Cambridge, Mass.-based biotech company, rose 4.9% to $21.97 on Wednesday after it said in a regulatory filing that it was working with the National Institutes of Health and two of its affiliates “on a potential vaccine response to the current public health emergency.” NIH is the U.S. government’s primary health research agency.

The stock surged as much as 11% in early trading before paring its gains. A spokeswoman for the National Institute of Allergy and Infectious Diseases, part of the NIH, confirmed it was working with Moderna to develop a vaccine for the new coronavirus strain.

Shares of Moderna rose 4.9% on Wednesday. Photo: cj gunther/EPA-EFE/Shutterstock

Moderna, which is developing genetic treatments that seek to instruct a patient’s own cells to produce disease-fighting proteins, went public on the Nasdaq Stock Market in 2018 in one of that year’s most closely watched biotech initial public offerings.

Despite Wednesday’s jump, the company’s shares are still trading below their IPO price of $23. A spokeswoman for Moderna declined to comment.

Federal and state health officials said Tuesday that a man in Washington state was the first confirmed U.S. case of the new coronavirus outbreak. The virus, which is believed to have originated in the central Chinese city of Wuhan, has sickened hundreds of people in China and has been linked to more than a dozen deaths.

Moderna wasn’t the only biotech stock facing volatility this week as investors have speculated on which firms might profit from the outbreak.

NanoViricides Inc., which works on nanotechnology-based antiviral treatments, sank 55% to $3.82 a share on Wednesday, while vaccine developer Novavax Inc. fell 28% to $7.09 a share.