"Amid the early-2020 outbreak and spread of the coronavirus, the pace of innovation among pharmaceutical companies has risen," says Karim Suwwan de Felipe, portfolio manager of Fidelity® Select Pharmaceuticals Portfolio.
Stock market volatility has not diminished Suwwan de Felipe's bullish view of companies focused on lifesaving drugs in oncology and rare diseases.
Moreover, he's carefully tracking companies that are attempting to develop vaccines for COVID-19, including Sanofi (SNY), Moderna (MRNA), and Germany's BioNTech (BNTX), all of which were fund holdings as of April 30.
Suwwan de Felipe notes Sanofi and GlaxoSmithKline (GSK) are collaborating to develop a coronavirus vaccine. The partnership makes sense, he says, because of Sanofi's expertise in producing antigen and GlaxoSmithKline's manufacturing capacity.
As for Moderna, he notes the company recently received a grant for up to $483 million to accelerate development of a potential vaccine. The company plans to hire an additional 150 team members to support these efforts.
Lastly, he notes that BioNTech, which has a vaccine candidate called BNT162, recently partnered with Pfizer to co-develop and potentially distribute its candidate, if it were to be approved. The partnership builds on an agreement struck in 2018 between the 2 companies to develop flu vaccines.
As of April 30, Suwwan de Felipe says he's focusing on investments mainly in well-capitalized, larger-cap firms he thinks are less likely to raise capital in a distressed financial market, as well as smaller firms with partnerships with larger companies.
Fidelity® Select Pharmaceuticals Portfolio held securities mentioned in this article on April 30, 2020. As of this date, Sanofi composed 8.99% of fund assets, Moderna composed 0.38% of fund assets, and BioNTech composed 0.54% of fund assets.
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