This week we learnt that scientists are making good progress with a vaccine against Covid-19. One Oxford professor suggested it could be available by the end of the year. Even if that is unrealistic, pharma stocks large and small are on the up, says Victor Hill.
White coats flapping
This week there was some promising news in the race for a vaccine. Professor Adrian Hill, Director of the Jenner Institute at the University of Oxford said on Monday (20 July) that a jab could be available by December if enough people could be recruited for trials. Health Secretary Hancock seconded that before the House of Commons health select committee on Tuesday. The very fact that Mr Hancock is so gung-ho, however, should give us pause.
There are apparently about 200 different teams – from big pharmaceutical companies, medical research entities and university laboratories – currently working on 23 different vaccines against SARS-CoV-2 (the virus that causes Covid-19). Most are collaborations: for example, the British pharmaceutical giant GlaxoSmithKline (LON:GSK) has joined forces with the French vaccine specialist Sanofi (EPA:SAN); and AstraZeneca (LON:AZN) is working with the University of Oxford.
The first official case of Covid-19 was recorded in Hubei Province, China on 08 December last year, though the name of this disease was only formulated on 11 February by the International Committee on Taxonomy of Viruses (ICTV). Most of us who follow the news were aware that there was something then called the 2019 novel coronavirus when Wuhan went into a hermetic lockdown on 23 January. Since then it has claimed 637,000 deaths worldwide[i].
So Covid-19 has been an identifiable pathogen and a threat to global public health for just six months. And it normally takes from five to 15 years to develop, trial, and commercialise a vaccine at scale. Therefore, any claim that a vaccine could seriously be available within 11 months of the virus being identified must be evaluated carefully. After all, there is still no vaccine for SARS, Ebola – or even HIV/AIDS, which has been around for about 38 years. (Though, true, there are extremely successful anti-viral treatments for HIV and thus it is no longer the death sentence it once was).
For a vaccine to be proven safe and efficacious it must be tested on at least 50,000 people. UK citizens are being encouraged by Health Secretary Hancock and others to sign up to the new NHS Covid-19 vaccine research registry[ii]. Kate Bingham, chair of the UK Government’s Vaccine Taskforce wants to carry out vaccine trials in coronavirus hotspots such as Leicester, Blackburn and Luton. She even suggested that a vaccine could be widely administered before it had been formally authorised by the regulators. The European Medicines Agency (EMA) – the rulings of which still apply in the UK until 31 December – normally takes from 18 to 24 months to authorise a new medicine. But, apparently, that could be reduced to 70 days using a fast-track procedure. And the vaccine could be administered on “compassionate” grounds – just as Remdesivir (manufactured by Gilead Sciences (NASDAQ:GILD)) has been given to very sick people in the United States even before getting FDA approval.
Planning for a global pandemic has been in progress since the Ebola epidemic of 2014 when the WHO and leading governments put research centres on standby for Disease X. The Jenner Institute has been working on vaccines for both Ebola and MERS (Middle East Respiratory Syndrome) for years. But in the case of both diseases the pathogens died down to (almost) nothing before trials could be instigated. But it seems that The Jenner Institute has been able to modify their prototype MERS vaccine to combat this related coronavirus. They were able to start testing their initial formulation on monkeys in March. And by mid-April they had already established that the vaccine was both safe and offered some degree of immunity.
How the Oxford trials were conducted
In the first phase volunteers were split into four groups and either received the Covid-19 vaccine or a safe and tested meningitis vaccine (the “control”). One of the groups was also given a double dose of the vaccine and a fourth a placebo. A second phase trial is currently underway involving another 10,000 participants in which some will be exposed to Covid-19. So far only healthy adults have been tested. The tricky part is to determine whether the vaccine will be effective for elderly folk and those with co-morbidities.
Human trials in the UK were hampered by the happy fact that the incidence of new coronavirus infections was falling rapidly – thanks, no doubt, to the lockdown. The Jenner Institute then initiated the third phase human trials from late May onwards in Brazil, South Africa and the USA where new cases were increasing rapidly. Some insiders believe that the safety and efficacy of the vaccine could be proven by November and that regulatory approval for a mass inoculation programme could be obtained shortly thereafter.
Shares in AstraZeneca, which is working alongside the Jenner Institute, hit an all-time high on Monday, closing at £93.20 having soared to over £100 during intra-day trading. The company announced that it had made a “breakthrough” in the human trials of a jab that is being developed in collaboration with the Oxford scientists. They confirmed that the vaccine is safe and that it triggers an immune response.
A study reprinted in The Lancet, based on a trial of 1,077 British adults aged 18-55 at five UK hospitals, showed that a single dose of the vaccine generates a non-specific T-cell response within 14 days and a specific antibody within 28 days in 91 percent of the participants. The vaccine uses a chimpanzee cold virus to deliver the gene for the coronavirus spike protein into human cells.
No serious adverse reactions were recorded, and some mild side effects (fatigue, headaches, and discomfort at the injection site) were treated with paracetamol. Some participants did experience mild flu-like symptoms temporarily. It will not be known if that confers sustained immunity until further trials are concluded. It may yet turn out that the vaccine requires booster jabs.
The UK government has already pre-ordered 100 million doses of the AstraZeneca vaccine. It is reported that the first vaccinations will be prioritised for frontline key workers such as nurses, the elderly, and people with chronic underlying conditions as well as possibly ethnic minorities which have experienced disproportionate morbidity.
AstraZeneca aims to manufacture one billion doses of the new vaccine within a year and has agreed that the Serum Institute of India will produce another billion. With a market capitalisation of around £122 billion, Astra Zeneca is now one of the largest constituents of the FTSE-100 index. It shares are up by about 22 percent year-to-date. Yet Daniel Mahoney of Polar Capital points out that, even if the vaccine works, AZN will not make a lot of money as margins will be tight. Rather, investors should focus on the company’s overall drug development pipeline – which is impressive.
This US pharmaceutical giant has been working with the German medical research specialist BioNTech and the French firm Valneva (EPA:VLA) on another candidate vaccine which has been trialled in Germany. This week the UK Government placed an order for 90 million doses of this vaccine (in addition to the AstraZeneca order).
On Monday, GSK agreed to buy a 10 percent stake in the German pharmaceutical player CureVac for £130 million. We await a definitive announcement on the progress of the vaccine they are developing.
Also on Monday, the shares of a less well-known niche biotech company, Synairgen, based in Southampton, rocketed – rising from around 36 pence to 188.5 pence. This is the kind of share price take-off that all biotech investors dream of.
Synairgen has been working on treatments for respiratory diseases for about 15 years. It was founded by three academics – Stephen Holgate, Donna Davies and Ratko Djukanovic – who had worked together at the University of Southampton School of Medicine. Over the weekend the company announced the development of “game-changing” new treatment for Covid-19 which might reduce the mortality rate of the disease by 80 percent.
The treatment involves the inhalation of a protein that is already commonly used in the treatment of multiple sclerosis. The protein is called interferon beta, which the human body naturally produces to combat viruses. It is delivered through a drug currently known as SNG001 which is inhaled using a nebuliser and then produces an immune response.
Synairgen’s trial of the treatment concluded that Covid-19 sufferers who exhibited the worst symptoms, many on ventilators, experienced much better outcomes when administered the treatment than those who were given a placebo. The average hospitalisation period of those taking the treatment was reduced from nine to six days. The company’s researchers claimed that the treatment would not only be effective in the fight against Covid-19, but that it could prove invaluable if there is a bout of winter flu this year before the coronavirus has been entirely eradicated.
It should be noted that the trial was conducted on a sample of just 101 patients and the findings have not yet been published or peer reviewed.
The US pharmaceutical company Moderna has also been conducting trials and announced on 15 July that its experimental vaccine has provoked an immune response in 45 people. The company is now progressing to Phase III trials. Its share price surged to nearly $95 last Friday (17 July) though yesterday it closed at $75. Even at that level the share price has nearly quadrupled year-to-date.
Words of caution
Jeremy Farrar, the Director of Wellcome Trust, doesn’t think there will be a vaccine by Christmas. He told the House of Commons select committee on Tuesday (21 July):
This infection is not going away, it’s now a human endemic infection… [Even if we had a vaccine or very good treatments] humanity will still be living with this virus for very many, many years… even decades to come…
Kate Bingham, Chair of the UK’s Vaccine Taskforce, said in a statement this week:
The fact that we have so many promising candidates already shows the unprecedented pace at which we are moving… But I urge against being complacent or over optimistic. The fact remains we may never get a vaccine; and if we do get one, we have to be prepared that it may not be a vaccine which prevents getting the virus, but rather one that reduces symptoms.
Professor Sarah Gilbert, lead researcher for the vaccine development programme, revealed this week that vaccine trials were being held up by a lack of inputs. Vaccines are created from a line of so-called immortal cells; but it takes time for these cells to proliferate, to be purified and to be concentrated to provide the correct dosage.
Meanwhile, a study conducted in Wanzhou, China suggests that people who develop antibodies after becoming infected with the coronavirus may lose them after a few months, especially if they exhibited no symptoms[iii]. That provokes the depressing thought that many people at least will never be able to develop immunity to Covid-19. On the other hand, Sweden’s state epidemiologist said on Tuesday that, so far, no cases of people falling ill twice from Covid-19 had been reported.
If there is a vaccine at all it is likely to take several forms – there will be more than one winner. Investors who wish to spread their bets might take a look at the L&G Healthcare Breakthrough UCITS ETC. This is exposed to the ROBO Global Healthcare Index which tracks Moderna, Lonza (SWX:LONN), Catalent (NYSE:CTLT) and 80 or so other biotech players with vaccine capacity.
It is just as well that Mr Johnson doesn’t have the time to surf the internet. There seems to be a lot of people, often distinguished figures, being rude about him these days. His one-time colleague at the Daily Telegraph, Simon Heffer, who is a dour small-c conservative of the old school, has written a piece about Mr Johnson’s handling of the pandemic in The Critic magazine which is one of the most vicious hatchet jobs I have ever read. Hatchet is not really le mot juste– think Vlad the Impaler wielding a massive quill pen.
On the other hand, Mr Johnson might be cheered by an article in Bloomberg this week by Tyler Cohen[iv] which argues that The UK’s Response to Covid-19 Has Been World Class. I thought it might be a spoof at first, but it isn’t. Professor Cohen thinks that the UK receives stellar marks for its biomedical response. “In fact,” writes Professor Cohen “I would argue it is tops in the world”.
He goes on to enumerate a number of innovative treatments that have been deployed in these islands to combat the pandemic, some of which – like the steroid dexamethasone – I have discussed in my Plague Year Journal in these pages.
Mr Johnson might want to disseminate the message more loudly that Britain has a world-class biomedical establishment. No wonder the Russians wanted to hack us – though the reports of the alleged hacking this week were confusing. (I can understand why they might wish to steal our scientific secrets – but why would they wish to plant malware on academic computers? Unless, of course, to facilitate the theft? I’ll have more to say about the global cyber-war, which is well underway – and intensifying, soon.)
One gets the impression that the British scientific establishment, personified by people like the Nobel Prize-winner Sir Paul Nurse, are not huge admirers of Mr Johnson. But if Britain emerges from this chapter as a biotech super-power, they might well end up saving his bacon.
[iv] Professor of Economics at George Mason University, Fairfax, Virginia.