Thanks to Coronavirus, virtually all of us are now preoccupied with a sense of dread. But take heart: salvation is on its way.

With some of the world’s best medical scientists working around the clock, a not-far-off vaccine is an inevitability, according to the World Health Organization and other leading health experts.

So now the race is on to determine who will be the first to innovate what will surely be a blockbuster drug - one that will be welcomed as a godsend by the world’s 7.8 billion people.

Among the vanguard of life sciences companies rising to the challenge is WPD Pharmaceuticals Inc. (CSE: WBIO) (FSE: 8SV1). This Canadian clinical stage pharmaceutical company has until recently been better known for its pioneering development of a suite of drug candidates that target certain different kinds of cancer.

However, the company’s pivot towards the innovation of anti-viral drugs is being viewed by the capital markets as a very positively strategic development, judging by the company’s high trading volume. This is all due to the fact that WPD is now teaming up with the NASDAQ-listed pharmaceutical company Moleculin Biotech Inc. (NASDAQ: MBRX) to innovate a vaccine for a global multi-billion-dollar marketplace.

In the event of the successful commercialization of a coronavirus vaccine, this newly-signed licencing agreement gives WPD exclusivity to 30 nations in Europe and Asia, including Russia. (More on this in a moment.)

The deadly coronavirus (seen above) is now on every continent

Teaming Up With the CDC in Coronavirus Research

Fortunately for WPD, its licencing partner, Moleculin, can now test the efficacy of its anti-viral biotechnology in a leading federal-government-funded research facility in the United States - one that has financial backing from the Centers for Disease Control (CDC), the National Institute of Allergy and Infectious Diseases (NIAID), the US Department of Defense, as well as other key federal government agencies.

Both companies, as well as the US government, are betting on a drug candidate known as WP1122, which has already shown considerable promise in pre-clinical studies as a novel therapy for treating a range of viruses, including Coronavirus, a.k.a. COVID-19.

Accordingly, the push to determine if WP1122 can prove itself to be a desperately-needed wonder drug should be very well-funded, thereby boosting its odds of success. Keep in mind that this superbug has triggered the first global pandemic to afflict this planet in over 100 years. And governments the world over will be willing to spend unlimited amounts on finding effective vaccines and then making them available to billions of people.

Always Back a Winner When It Matters Most

Another key driver for WP1122’s prospects is the fact that this drug candidate is the brainchild of one of Moleculin’s founders, Dr. Waldemar Priebe, Ph.D. A world-renowned medicinal chemist, he is also an extraordinarily successful entrepreneur in the life sciences industry, which investors should keep in mind.

In fact, he has founded no less than six pharmaceutical companies. Among them is Reata Pharmaceuticals (NASDAQ: RETA), which has become a pharmaceutical powerhouse with a market capitalization on NASDAQ of over US $4.6 billion, as well as two other Nasdaq-listed pharmaceutical success stories.

As a leading medical academic, he is also a Professor of Medicinal Chemistry in the Department of Experimental Therapeutics at MD Anderson Cancer Center in Houston, and he has more than 200 scientific publications to his name.

Furthermore, investors should take note that Dr. Priebe has in excess of 50 patents to his name, and he has earned the distinction of innovating no less than five drug candidates that have all reached clinical studies in humans.

Due to his highly accomplished track record, Dr. Priebe’s heightened focus on making an anti-viral breakthrough should not be taken lightly. It also goes a long way towards explaining why the CEO of WPD, Mariusz Olejniczak, relishes the opportunity to work with Moleculin.

He commented in the most recent WPD news release, “We are eager for testing to begin on our WP1122 drug for antiviral properties against viruses, including the prevalent Coronavirus... Our hope for this kind of therapeutic approach is not only as a potential treatment for infected patients, but even as a possible preventative measure.”

A coronavirus vaccine is surely on its way. Who will be the first to develop one?

Clinical Trials in Oncology: Mitigating Risk Via Diversification

WPD’s share price is underpinned by a promising portfolio of oncology drug candidates for treating melanoma, brain cancer, leukemia and pancreatic cancer. To date, this life sciences company has deployed towards R&D over US $60 million of funds raised in the capital markets, as well as a further combined US $43 million in financial support from US and Polish government agencies.

It certainly looks like money well spent being that a total of 10 novel drug candidates are already in-development. Four of them are at various clinical development stages. They include the drug candidate Berubicin which is being developed as a form of chemotherapy that targets an aggressive type of brain cancer known as glioblastoma multiforme (GBM).

WPD just reported that a patient from its Phase I clinical trial has reported his status as cancer-free a full 13 years after his treatment. In fact, a total of 44% of the patients in the same trial experienced a statistically significant improvement in their condition.

Accordingly, WPD intends to commence Phase 2 clinical trials in conjunction with a joint venture partner, CNS Pharmaceuticals Inc., beginning in H2 of this year. This development alone should prove to be a key catalyst to a higher share price valuation in 2020, notwithstanding the upside potential offered by the presaged development of WP1122.

Investment Takeaways

In a coronavirus-induced stock market meltdown that is now heralding a sharp global recession, some of the few stocks that are weathering the storm the best are ones in health care and life sciences.

This speaks to the fact that a few select sectors will thrive - including companies that are active in the development of immunology-based therapies. WPD and Moleculin are two such companies.

So how will the coronavirus influence their valuations going forward? On the plus side for Moleculin, it will earn all the glory and accolades if it succeeds in commercializing WP1122 as a vaccine. And its share price would no doubt catapult to many multiples of its current value. But Moleculin must assume all of the downside risk if this drug candidate fails at the clinical trial stage.

Conversely, WPD is not required to co-finance the development of WP1122 and is therefore largely protected from this make-or-break risk for WP1122. However, WPD now benefits from the extraordinary upside opportunity to achieve massive commercial success in over 30 nations. This reality is virtually assured in the eventuality that WP1122 is successfully commercialized.

On a technical note, WPD has approximately 111.5 million shares outstanding (only 115.5 million fully diluted), of which 36% per cent of the stock is held by insiders, who are subject to stringent escrow release provisions). Therefore, with such a relatively constrained share structure and an arguably undervalued capitalization of only around CDN $88 million, the advent of positive news flow in the coming months promises to be a powerful catalyst for a steadily ascendant share price.

This surely makes WPD a rare gem of an investment opportunity in a newly emerging pronounced bear market for equities. After all, it’s worth remembering the often-quoted maxim that the Chinese word for crisis - Weiji jiyu - is also the same word for opportunity.

However, it seems that this sage reality is already well understood by many speculative investors - whom sent WPD’s share price powering higher on a big surge in trading volume in response to news of the licencing deal with Moleculin.

Stay tuned. This story is a stock to watch, especially when compared to a sobering backdrop of diminishing returns for most equities for the foreseeable future.

ABOUT THE AUTHOR: Marc Davis has a deep background in the capital markets spanning 30 years, having mostly worked as an analyst and stock market commentator. He is also a longstanding financial journalist. Over the years, his articles have also appeared in dozens of digital publications worldwide. They include USA Today, CBS Money Watch, The Times (UK), Investors’ Business Daily, the Financial Post, Reuters, National Post, Google News, Barron’s, China Daily, Huffington Post, AOL, City A.M. (London), Bloomberg, WallStreetOnline.de (Germany) and the Independent (UK). He has also appeared in business interviews on the BBC, CBC, and SKY TV.