The 2nd Wave
The West continues to see rising new COVID-19 cases, with the U.S continuing to report more than 100,000 new cases a day.
Things have not been much better for Europe, which has seen lockdown measures reintroduced in a number of member states.
While the economic impact of the 2nd wave is likely to be particularly severe, hopes of a COVID-19 vaccine continue to prop up the global equity markets.
Maintaining current levels, however, will largely depend upon the timing of a vaccine.
The longer that lockdown measures remain, the slower the economic recovery will likely be.
An effective vaccine will not bring back small to medium-sized companies that collapsed due to the pandemic. A vaccine would also fail to deliver a sharp rebound in labor market conditions.
The Race Participants
There are a vast number of pharma companies that are currently in the race to deliver the 1st effective COVID-19 vaccine.
A number of the leading companies are shown in the chart below:
While the companies listed above were trialing 60 different drugs and vaccines. There are many more in trial phases, however. As at 5th November, 670 drugs and vaccines were in development, targeting the coronavirus.
Looking at the top 10 companies listed above and a few more in more detail:
Mateon Therapeutics: Listed on OTCMKTS (“MATN”) and headquartered in California.
Merck & Co.: Listed on the New York Stock Exchange (“MRK”) and headquartered in New Jersey, USA.
Moderna Inc.: Listed on the NASDAQ (“MRNA”) and headquartered in Cambridge, Massachusetts, USA.
Pfizer Inc.: Listed on the New York Stock Exchange (“PFE”) and headquartered in New York City. (Pfizer Inc. has partnered with Germany’s BioNTech SE)
Sorrento Therapeutics: Listed on the NASDAQ (“SRNE”) and headquartered in California. Currently trailing many of the front runners in the race for an effective vaccine.
Talem Therapeutics: This is a wholly-owned subsidiary of ImmunoPrecise Antibodies USA. Its parent company, ImmunoPrecise Antibodies Ltd is listed on the Toronto Stock Exchange.
Tonix Pharmaceuticals: Listed on the NASDAQ (“TNXP”) and headquartered in New Jersey.
AstraZeneca: Listed on the London Stock Exchange (“AZN”) and headquartered in Cambridge, England and Sodertalje, Sweden.
GlaxoSmithKline: Listed on the London Stock Exchange (“GSK”) and headquartered in Brentford, England.
Grifols, S.A: Listed on the Bolsa de Madrid (“GRF”) and headquartered in Barcelona, Spain.
GC Pharma: Listed on the Korea Stock Exchange (“006280”) and headquartered in Yongin, South Korea.
As indicated above, the U.S pharmas make up the lion’s share of companies in the race to deliver a COVID-19 vaccine.
Coronavirus – The Latest Numbers
At the time of writing, the total number of COVID-19 cases has risen to 51,241,021. This is up from 49 million cases less than a week ago. More than 20% of the total number of cases has stemmed from the U.S. The U.S has reported 10,421,956 COVID-19 related cases and 244,448 related deaths.
With India not far behind, reporting 8,591,075 COVID-19 related cases, the sense of urgency towards a COVID-19 vaccine has increased.
France, Spain, and the UK have now seen more than 1 million COVID-19 related cases. Italy and Germany have fared somewhat better, but not by much.
For this reason, the EU and U.S economies remain the greatest concern. Biden’s Presidential Election victory adds another dimension to the economic outlook for the U.S and beyond.
Following Trump’s willingness to reopen the U.S economy at any cost, Biden’s stance is likely to be a more conservative one.
The President-Elect has clearly stated that tackling the COVID-19 pandemic will be a priority. This could mean enforced containment measures in the near-term, which would add further pressure on the U.S economy.
A lack of a sizeable stimulus package this year would make things all the more bearish for the U.S economy.
The Clinical Trials
After last week’s review of the key pharmas in the race to develop an effective COVID-19 vaccine, Pfizer delivered a boost for the global equity markets on Monday.
Working with Germany’s BioNTech SE, Pfizer released its latest results, which were particularly promising.
On Monday, Pfizer Inc. announced that its COVID-19 vaccine had an efficacy rate of more than 90%. This meant that the trial vaccine prevented COVID-19 in more than 90% of candidates in phase 3 testing. In response, Pfizer Inc.’s share price jumped by 7.69% on Monday. BioNTech SE’s share price shot up by an even more impressive 14.69% in response to the news.
While this is a huge step towards an effective vaccine, however, there is some way to go before a worldwide distribution of a vaccine.
In addition to efficacy rates, safety and consistent manufacturing are additional requirements that need to be met in order to receive FDA approval.
The markets will therefore need to monitor progress in the coming weeks, as Pfizer delivers more data.
So, with Pfizer Inc. and BioNTech SE leading the charge, other pharmas will now be under pressure to deliver similar results.
Since last week’s review, the front runners and main players remain the same.
The Front Runners
- Pfizer Inc. (“PFE”) and BioNTech SE will announce further results in the next few weeks. The results will not only include efficacy numbers but also details on safety and manufacturing sustainability. Pfizer Inc. will apply from the FDA for emergency use authorization once it satisfies all three criteria. This could come as soon as the end of November.
- AstraZeneca (“AZN”) announced last week that they are on track to deliver a vaccine as early as this year. In response to last week’s announcement, news hit the wires yesterday that AstraZeneca has commenced vaccine production in Australia. This is despite the fact that the AstraZeneca and University of Oxford vaccine is still in phase-3 clinical trials. Vaccine tests results are scheduled to be delivered by the end of the year. The move is a gamble, with the group producing vaccines in the hope of acceptable results. In response to Pfizer Inc.’s news on Monday, AstraZeneca’s stock fell by 2.03% on the day.
- Moderna Inc. (“MRNA”) is expected to have similar results to that of Pfizer Inc. as it has relied upon the same mRNA tech in vaccine development. Moderna Inc. is due to release its clinical trial results in the coming weeks.
What Lies Ahead
So, as the big pharmas make progress towards an effective COVID-19 vaccine, there are a few issues to consider.
Key considerations will include
- Duration of effectiveness: The shorter the duration of the vaccine’s effectiveness, the less effective the vaccine.
- Asymptomatic prevention: Clarity on whether the vaccine can prevent asymptomatic carriers.
- Initial support and supply projections near to medium-term: For bringing an end to the global pandemic, supply will be a key consideration.
- Side effects: Major side effects could reduce the number of the population willing to take the vaccine.
- Storage requirements: The storage requirements of the virus will also influence delivery on a global scale.
While the efficacy numbers are impressive, therefore, the pharma world will need to deliver more to end the COVID-19 pandemic. This could therefore lead to sizeable swings across the global financial markets as optimism shifts to reality.