The vaccines for the pandemic virus are not just for preventing the spread… They are also a significant source of revenue now and coming.
Millions upon millions of dosages have been manufactured and sold to governments and private healthcare companies, creating major flows of revenue for the leaders in the market.
Johnson & Johnson (JNJ), AstraZeneca PLC (AZN) and others have gone the traditional route to vaccine development – utilizing existing technologies that have been deployed for other situations, including the annual influenza threats.
Then, there is the next level development involving messenger ribonucleic acid (mRNA) that’s been led by Pfizer Inc. (PFE) and its partner BioNTech SE (BNTX) as well as Moderna, Inc. (MRNA).
This newer technology is not just for the current virus, however, as it sets up a whole new world of potential treatments of a wider variety of health threats. In turn, this means that the companies behind this rapidly developing and evolving technology will potentially have new pipelines of products and treatments.
The vaccine market is just one part of the overall drug and treatment development market. There are countless companies from the early stage to the mega-cap establishment that are at work 24/7 in laboratories working on a myriad of cures.
And what comes out of these laboratories are of course alchemy products. They take basic building blocks of chemicals and medicines and, with technology, create billions of dollars of drugs and treatments.
Dow Jones US Biotechnology Index -- Source: Dow Jones
Biotechnology is one of the ongoing super-charged segments of the market. The companies inside this segment can go not just from zero to hero for patients around the globe – but they also can deliver huge gains for their shareholders.
The Company Behind All of This
All of the above companies as well as countless others rely on laboratories. These are highly specialized facilities. They need to be highly secure in terms of their environment, including water, natural gas and other inputs – including controlled and filtered air.
These are not just found in generic office parks. They need to be built specifically – or heavily modified from specific existing buildings to meet the standards needed for drug development companies.
And they tend to be collected around each other. They also tend to be collected around leading academic and research facilities – especially at major universities. They all need brainiacs to do the work, and they also need government grants and support that tend to be found in academic settings.
The company that is the leader in this market is Alexandria Real Estate Equities, Inc. (ARE). This is the Pasadena, California-based company that’s set up as a real estate investment trust (REIT) that owns primary laboratories and related facilities in the key and core clustered areas for drug and biotechnology development.
Alexandria Real Estate Equities, Inc. Price -- Source: Dow Jones
Most of the leaders in this market depend on Alexandria Real Estate to build and develop their laboratories and other required facilities and lease them for their must-have space.
Don’t just think about it as a REIT or an office building owner. Just as folks got rich ages ago selling picks and shovels during the gold rush, you can think of this company as the ultimate “picks and shovels” stock providing the necessities for drug and biotechnology companies.
That is what makes this company a compelling buy right now behind the scenes.
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