Global biotech and pharma leverage pipelines for COVID-19, but no quick win solutions - Analysis

24 March 2020 - 06:07 am UTC

by Mintoi Chessa-Florea and Davide Salvi in London and Yiqin Shen in New York, with analytics by Olivier Gilkinet

[The 11th paragraph has been amended to clarify Jacob Becraft's quote. The 19th paragraph has been updated to clarify that investments are required in response technologies against pandemics.]

 

  • CureVac, BioNTech and Moderna adopt mRNA approach for quick route to market
  • Investment paradigm to shift to long term approach and pre-emption of pandemics
  • WHO testing existing drugs, including chloroquine for malaria

 

As the World Health Organisation (WHO) announced last week a coordinated global trial (SOLIDARITY) that spans 10 countries to test effective treatments against COVID-19, biotechs and large cap pharma have promptly stepped up efforts to develop vaccines.

 

carpe diem effect has spurred a host of biotechs across Europe and the US to look at leveraging existing pipelines to see if they can repurpose any drugs for the treatment or prevention of coronavirus.

 

In the UK, Synairgen [LON:SNG] announced late last week that it had received approval to launch a Phase II clinical trial of its lead drug SNG001 in patients with COVID-19. The drug is an inhaled formulation of interferon-beta-1a and is being developed to treat people with chronic obstructive pulmonary disease (COPD) that also have respiratory viral infections.

 

Meanwhile, Japanese Fujifilm Toyama Chemical’s drug, favipiravir (Avigan), which is used to treat new strains of influenza, has reportedly been found to be effective against coronavirus patients in China with mild to moderate symptoms, but has limitations given reported side effects in certain patient categories.

 

In Germany, CureVac and BioNTech as well as US-based Moderna Therapeutics - which only last week initiated a Phase I study in volunteers, are all using messenger RNA (mRNA)-based drugs as potential coronavirus treatments.

 

Other players that are also looking to raise financing to develop COVID-19 vaccines include French Genglis and Swiss Memo Therapeutics, as reported by this news service.

 

Long-term focus

 

There is an opportunity to inject funds in biotech at this time, but there is also hesitancy and scepticism from the investor community, according to Hassan Choudury, senior consultant at Cello Health. Not all of the vaccines in development will get to market or show efficacy, yet for those that do, the payoff will be large, Choudury said.

 

A pragmatic approach will be taken by investors who ask themselves how lucrative it can be to invest in COVID-19 vaccines, he said. Most important, there are no quick wins, as the vaccines will take time to get to market, he added.

 

There are certain steps and protocols to follow which cannot be rushed, Endong Zhai, executive director at DC Advisory, agreed. However, if regulators relax certain rules around drug development, this could be beneficial to those companies that want to accelerate the process of bringing vaccines to market and will also boost investment in those areas, he argued.

 

mRNA-based vaccines, as are being developed by Moderna Therapeutics, CureVac and BioNTech, would have a quick route to market as one can develop this type of vaccine very quickly, Choudury said.

 

Jacob Becraft, CEO of Cambridge, Massachusetts-based Strand Therapeutics echoed this view saying that RNA-based vaccines have the advantage of quick turnaround in formulation and production, making it a promising, timely solution to a global pandemic like the COVID-19 outbreak.

 

mRNA could be manufactured in a short timeframe -- around a month or so, Becraft said. “It’s like replacing software rather than building a new computer”. mRNA vaccines are incredibly versatile and potent, he added.

 

However, in terms of risk appetite, there is no precedent of an mRNA vaccine that has proven efficacy, Choudury cautioned.

 

Investor appetite

 

The market is still buoyant, according to Choudury, and at this time companies developing drugs for rare diseases that have, for example, respiratory symptoms – similar to COVID-19, could get attention from investors.

 

There will also be increased awareness of investment in technologies that monitor respiratory symptoms using point-of-care or at-home diagnostics, Choudury suggested.

 

What the current landscape is pointing to is that VC funds that have a long-term strategy will ride the changes in 2020, while those that wanted a quick exit or were looking to exit in 2020 will have to reconsider their plans, he added.

 

The big difference between Chinese and European investors is that the latter are focused on the short-term and on areas that could see a win from such an outbreak, Zhai said. For Chinese investors, on the other hand, the focus is very much long-term, and more focused on medtech and healthcare services, he added.

 

Chinese investors do not invest in companies making masks, for instance; the investment focus going forward will probably be in areas that help prevent such outbreaks from happening again, and segments that help deal with outbreaks if they do occur, Zhai said.

 

For the biotech sector in the US and across the world, this is a wake-up call to reflect on how to better prepare for global pandemics and public health emergencies, Becraft said. Such efforts require major funding both from the public and private sectors, he said. Even after COVID-19 is over, investment should continue in response technologies against viral pandemics, especially towards building infrastructure as ‘pre-vaccine’ resources. 

 

As a result of COVID-19, some VC funds will amend their views on quick wins and instead garner a long-term approach to investing in biotech, Choudury agreed. VC investment approaches may change, he said, requiring VC funds to double-down on the number of investments.

 

Sponsors could instead follow a drug’s development process until Phase III so that there can be a substantial value increase instead of exiting when the drug is in Phase II, he added.

 

WHO landscape

 

The WHO said it will test four different drugs or combinations – namely Gilead Sciences' [NASDAQ:GILD] antiviral drug, remdesivir; AbbVie’s [NYSE:ABBV] Kaletra, an antiviral drug that combines lopinavir and ritonavir for the treatment and prevention of HIV; lopinavir and ritonavir plus interferon beta – which was previously administered to multiple sclerosis patients; and chloroquine, a well-known generic treatment for malaria.

 

The effectiveness of these drugs will be compared to the standard of care, which is effectively whatever standards hospitals are using now to treat COVID-19 patients. According to a published medical report on the New England Medical Journal, however, research from Wuhan, China, found that the lopinavir and ritonavir combination had no effect on coronavirus patients or their mortality.

 

Countries that have signed up to the SOLIDARITY trial include Thailand, Argentina, Bahrain, Canada, France, Iran, Norway, South Africa, Spain and Switzerland.

 

 

Below is a list, which is not exhaustive, of  the main COVID-19 drugs in development and ancillary services for COVID-19:

 

Company Country Mechanism of action Development stage Drug name/news
Drug Developers
Fujifilm HoldingsToyama Chemical Co Japan T-705, against RNA viruses Approved for flu/broad spectrum for influenza strains Avigan (favipiravir) Reportedly works on COVID-19
CureVac Germany mRNA-based drugs for vaccines and therapeutics Preclinical Rejects allegations about offers for takeover of the company or its technology
CanSino Biologics China adenovirus-based viral vector vaccine Approved to begin human trials with collaboration Ad5-nCoV- a vaccine jointly developed by the company and the Institute of Biotechnology, Academy of Military Medical Sciences. In 2017, the same technology helped the company earn a Chinese nod for its Ebola vaccine.
Janssen/Beth Israel Deaconess Medical Center (BIDMC) US PER.C6 and AdVac technologies for vaccines Preclinical/Phase I by 4Q20  
PharmaMar Spain Targeting eEF1A2 protein In-vitro studies of Aplidin (plitidepsin) on the human coronavirus HCoV-229E, which has a multiplication and propagation mechanism very similar to COVID-19, have been positive with a potency of the nanomolar order. Awaiting regulatory go-ahead for studies in humans Aplidin (plitidepsin) GENOMICA diagnostic kits for COVID-19 coronavirus receive CE conformity marking
Medicago (subsidiary of Mitsubishi Tanabe Pharma) Japan/Canada Virus-Like Particle (VLPs) - antibodies Pipeline in Research/Discovery phase  
BioNTech/Fosun Pharmaceutical Germany/China  mRNA Aiming to start testing on humans from late April BioNTech in China alliance with Fosun over potential coronavirus vaccine
BioNTech/Pfizer Germany/US mRNA Development outside of China – due to start
Expected to enter clinical testing by the end of Apr-2020
Signed agreement in 2018 for mRNA-based vaccines to prevent influenza (flu)
Potential mRNA-based coronavirus vaccine aimed at preventing COVID19 infection
Tiziana Life Sciences UK/US Fully Human Anti-Interleukin-6-Receptor Monoclonal Antibody Preclinical – expediting development but does not say when it will go into Phase I trials TZLS-501, based on evidence, IL-6 antagonists work well for COVID-19
Sanofi/Regeneron France/US Phase II/III Kevzara - Approved for Rheumatoid Arthritis Sanofi and Regeneron are ready to enrol a Phase II/III clinical program studying arthritis drug Kevzara as a therapy for patients hospitalized with severe COVID-19 (16/03/2020)
Moderna Therapeutics UK/US mRNA-1273 Preclinical Novel coronavirus (SARS-CoV-2) vaccine in Phase I clinical trials began on 16/03/20, based on a formulation selected by Moderna Therapeutics and the National Institute of Allergy and Infectious Diseases (NIAID).
Apps/Services
Corona Map UK  App In development

iOS/Android app that shows a map of all users with COVID-19 or those that are showing symptoms (self-reported).

PatchAI Italy  Triage platform  In development Adapting Clinical Trials platform to assist in the fight against COVID-19, provides a Virtual Assistant that communicates with patients and performs a Flu Triage. The triage assess the patient risk state and channels them onto the correct NHS resources. A map with the patient position and risk group are shown to the Agencies in charge in order for them to follow and monitor the disease spread. Working currently with the Italian Government and EY.
DIY Ventilators US  Device parts  In development Building a library of ventilator designs that can be built at- or near-site with locally-available parts.
Diagnostics
Qiagen Netherlands  Diagnostic COVID-19 kit Marketed Shipping to US as of today (24/03/2020)
ThermoFisher US  Diagnostic COVID-19 kit Marketed Shipping since last week
Radish Health US  Telemedicine Pilot studies Piloting virtual visits with the capacity to do athome testing for COVID-19.

 

For a list of transactions with above mentioned companies, please click here.

 

Advisory firms involved with above mentioned companies in transactions announced since October 2019:

 

Advisors Financial Legal PR
Sell-side Barclays;
Guggenheim Partners;
Jefferies;
Bank of America;
Centerview Partners;
Duff & Phelps;
Goldman Sachs & Co;
KPMG;
Moelis & Company;
Nomura Holdings;
Ondra Partners;
RM Global Partners
Gleiss Lutz;
King & Spalding;
White & Case;
Cleary Gottlieb Steen & Hamilton;
Davis Polk & Wardwell;
Fangda Partners;
Sullivan & Cromwell;
Paul Hastings;
De Brauw Blackstone Westbroek;
Mori Hamada & Matsumoto;
Wolf Theiss Rechtsanwaelte;
Weil Gotshal & Manges;
Wachtell, Lipton, Rosen & Katz;
Wilson Sonsini Goodrich & Rosati;
Hughes Hubbard & Reed;
Goodwin Procter;
Linklaters;
Nakamura;
Mintz Levin Cohn Ferris Glovsky & Popeo;
Tsunoda & Matsumoto
Gladstone Place Partners;
Stern Investor Relations;
Canale Communications
Buy-side Credit Suisse;
JPMorgan;
Morgan Stanley;
PJT Partners;
UBS Investment Bank
Covington & Burling;
Morgan Lewis & Bockius;
Simmons & Simmons;
Nagashima Ohno & Tsunematsu;
Morrison & Foerster;
CMS;
Cooley;
Simpson Thacher & Bartlett;
Cravath, Swaine & Moore;
Simpson Thacher & Bartlett;
Freshfields Bruckhaus Deringer;
Kirkland & Ellis;
Willkie Farr & Gallagher;
Hengeler Mueller;
Sidley Austin;
Wilson Sonsini Goodrich & Rosati;
NautaDutilh;
Winston & Strawn;
Stibbe;
Global Law Office
Joele Frank Wilkinson Brimmer Katcher;
Trophic Communications;
Image Sept;
Kekst CNC (Publicis);
ICR;
Sard Verbinnen & Co