A nurse holds up a one dose bottle and a prepared syringe of measles, mumps and rubella virus vaccine made by Merck at the Utah County Health Department in Provo, Utah.

Traders are hoping their initiatives to develop treatment and prevention for the coronavirus could come to fruition at some point. Vir Biotechnology surged 111% in the past month, while Novavax gained 91% during the same period.

The deadly coronavirus worsened quickly this month, roiling the financial markets as investors fled risk assets amid concerns the outbreak would disrupt the global economy. Meanwhile, a number of biotech companies have ramped up vaccine or drug programs to battle the disease, causing investors to bid up their shares amid the market rout.

"At least a dozen companies have informally or formally announced vaccine or drug development initiatives to address" the virus, Needham's analyst Alan Carr said in a note. "It appears at least a few programs will have moved into clinical testing within a few months."

These programs include drugs already approved for other viral infections, unapproved drugs initially developed for other viruses, new monoclonal antibodies, new vaccines, the analyst pointed out.

Inovio Pharmaceuticals skyrocketed 37% in January as it said it's in the process of developing a vaccine against the new deadly virus.

But analysts cautioned any commercial treatment from Inovio could be years away. Buyers in these stocks should beware as that could be the issue with any of these names amid the rampant speculation.

Morgan Stanley is bullish on Moderna, who recently indicated that it is working on a potential vaccine for the coronavirus.

"Moderna has a potential benefit over traditional vaccine makers in that once it has the sequences that code for the most immunogenic part of the virus' surface proteins, or antigens, management can rapidly make a clinical development candidate," the bank's analyst Matthew Harrison said in a note.

The analyst also has high hopes for Regeneron, saying its screening technology could be used to potentially produce therapeutic antibodies against the virus.

"During the Ebola outbreak, Regeneron was able to move from development to validation of its therapeutic candidate in 6 months," Harrison said.

— CNBC's contributed to this report.