Pharma learns many lessons from COVID-19 shockwave


Back in January, the European pharmaceutical sector was preparing for what was expected to be its best year yet since 1997, with the main concerns only revolving around politics ahead of the US election and Brexit.

At the time, COVID-19 was a new, mysterious virus that had forced millions of Chinese to lock themselves at home, while people elsewhere led their lives as normal in more or less crowded spaces.

Reading a Lancet report at breakfast table, Uğur Şahin and Özlem Türeci, couple and founders of German firm BioNTech (NASDAQ:BNTX), decided to dedicate all their resources to start developing a potential vaccine.

In a matter of two months, most pharma companies were scrambling to find out how they could apply their technology and expertise to find solutions for the pandemic.

Immediate disruption

Elective surgeries, routine appointments and even clinical trials were put on hold; producers of bandages and other medical equipment such as Smith & Nephew PLC (LON:SN.) are experiencing subdued demand to this day.

Patients have been reluctant to attend medical settings, where there are more chances to catch the virus than staying at home, while physicians assess the risks before calling people in.

Conversely, the quickest to address unmet needs have had a stellar year, especially those focused on vaccines since immunising the world seems the only way out the pandemic.

Vaccines broke all records

After partnering with US giant Pfizer Inc. (NYSE:PFE), BioNTech became the first company to have developed a COVID-19 vaccine approved by the authorities.

It was a record-breaking achievement on many fronts: firstly, it was ready for rollout in 10 months when most jabs require a minimum of five years; secondly, it was the first ever mRNA-based drug to be approved for human use.

“mRNA vaccines are what will be remembered from this year,” Adam Barker, analyst at UK broker Shore Capital, told Proactive.

“True that was in response to COVID-19, but this was a big year as a proof of concept for that technology and it will be very interesting to see how that technology is expanded going forward.”

While traditional vaccines expose the body to the inactivated virus to build a response in antibodies, mRNA instructs a patient’s own cells to produce proteins that could prevent disease.

Moderna Therapeutics (NASDAQ:MRNA), which was the first biotech to take a COVID-19 vaccine into the last stage of trials, has also used the same type of mRNA technology in its inoculation, which has been approved in the US.

Another star of the show has been the jab developed by Oxford University in partnership with AstraZeneca (LON:AZN), which followed the traditional route and is expected to be approved in the UK by year-end.

2020 has truly been a year to remember for the Anglo-Swedish firm despite some COVID-19 vaccine setbacks, as it got a flurry of approvals for many oncology projects, while it entered 2021 with an agreement to buy US rare disease specialist Alexion Pharmaceuticals Inc (NASDAQ:ALXN) for US$39bn.

Barker reckons oncology, neuroscience and rare disease will remain key areas of focus in the new year thanks to innovation, while the AstraZeneca/Alexion deal shows “how important rare diseases will be for growth in the industry”.

Sector boost

According to Paul Major, portfolio manager at BB Healthcare Trust PLC (LON:BBH), these big company developments have restored the public’s faith in the sector, while smaller players have been given a boost.

Traditionally, UK tiddlers have been struggling with low cash levels as well as lengthy regulatory processes compared to the relatively speedy US bureaucracy, while an underfunded NHS is keeping demand for new technologies very low.

For biotech projects especially, investors have looked at UK companies as having less potential for success compared to US rivals with much more cash to splurge.

But after COVID-19 hit, AIM-listed firms such as Novacyt SA (LON:NCYT), Synairgen PLC (LON:SNG), Tiziana Life Sciences PLC (LON:TILS), Genedrive PLC (LON:GDR), Omega Diagnostics Group PLC (LON:ODX), Avacta (LON:AVCT), Open Orphan PLC (LON:ORPH) have seen their fortunes take a new turn thanks to projects to diagnose, treat and prevent the disease.

Share price growth was slowed down after the Pfizer/BioNTech vaccine was approved, however experts have noted we are likely to need masks, tests and treatment until the world reaches herd immunity, which will take years.

Nonetheless, investor BB Healthcare have been focusing on projects that aren’t depending or aren’t likely do be disrupted by the pandemic.

“As a fund, we have made a conscious decision in May this year to pivot our portfolio away from elective surgery procedures and general medicine precisely to what we call essential therapeutics, that keep people alive or are very important to maintain the quality of life,” Major said.

“There’s a view in healthcare that the second quarter of 2021 is going to be normal or better than normal,” he added, highlighting that view is based on the vaccine rollout.

The challenges

Because many people feel they might be just about to receive the jab, Major noted, they have been requesting to postpone minor surgeries or procedures from January to March or April.

Similarly, it has been challenging for many companies to launch a novel drug in an environment where people are reluctant to get out of the house: for instance, Esperion’s cholesterol drug Nexletol and Biohaven’s migraine treatment Nurtec have seen a slower uptake than it could have been in pre-pandemic times.

Prescription volumes for chronic medications are also running below normal because patients aren’t motivated to see the doctor to get them renewed.

Equally, first-phase clinical trials have been postponed or delayed because of the challenges of having participants coming in the clinic, while regulators have been told to prioritise COVID-19 vaccines.

Positive developments

In this sense, developers of cancer treatment, for example, are better positioned to face the pandemic because authorities agree it’s essential work that must go on.

Some companies have been creative: for example, SkinBioTherapeutics PLC (LON:SBTX) asked participants for a psoriasis study to send data via a mobile app.

In fact, tech progress has underpinned the year: we have seen Moderna’s investment in robotics, IT and production processes to scale up production, Relay Therapeutics’ on-screen molecule design to study proteins and genome editing studied by Emmanuelle Charpentier and Jennifer A Doudna, who won the Nobel Prizes for Chemistry in October.

DeepMind, a London-based subsidiary of Google’s owner Alphabet Inc, made a breakthrough discovery after figuring out what shapes proteins fold into, solving the 50-year-old ‘folding problem’.

But, as Major told Proactive, the main takeaway from this chaotic year has been the collaboration across the global scientific community.

“We have seen an unprecedented sharing of data across the globe that’s enabled people to rapidly modify treatment protocols, risk assessments,” he said.

“It has really demonstrated the value of collaboration, the value of sharing data and the value of real-world clinical data and comparative trials, and hopefully that lesson isn’t going to be lost… There’s always a best way and worst way of doing something and the only way to figure it out is by doing comparisons and sharing data.”


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