Implications of early COVID-19 vaccine data

Implications of early COVID-19 vaccine data

News this week has largely been dominated by talk about a COVID-19 vaccine and finnCap’s Rude Health Life Sciences Sector Report is one of the first to focus on the implications of the early data surrounding the vaccine. The report acknowledges that the initial results are promising but warns that an over-reaction in the market shouldn’t diminish the need for more treatments and testing in the future.

At the beginning of the week, Pfizer and BioNTech announced the first interim analysis from the Phase III study of its COVID-19 vaccine candidate, which was found to be more than 90% effective in preventing COVID-19 in participants without evidence of prior SARS-CoV-2 infection in the first interim efficacy analysis.

Just a day later, The National Research Centre for Epidemiology and Microbiology announced that their Sputnik V vaccine – the world’s first registered vaccine against COVID-19 – had demonstrated an efficacy rate of 92% after the second dose, based on the first interim data from the largest double-blind, randomised, placebo-controlled Phase III clinical trials in Russia involving 40,000 volunteers.

Significant findings in the report’s response to the vaccines include:

Unknowns

Full results have not been released or peer-reviewed. Multiple unknowns remain, e.g. its efficacy in certain demographics – such as the elderly who react less well to immunisation. While the vaccine may prevent illness in response to SARS-CoV-2, it is unknown whether it will prevent asymptomatic infection – whether it will prevent virus shedding, and therefore have an effect on community transmission. Duration of protection is also unknown, as are long-term safety implications.

Challenges

Vaccine manufacturing is complex, and every batch has to be quality assured before release. This vaccine requires two doses, three weeks apart, before it can be effective. It must be stored at ultra-cold storage, below -80°C. A roll-out campaign is likely to be slow and will require many months to cover a significant proportion of the population. Anti-vaccination movements, and general public concerns over the rapid speed of COVID-19 vaccine development also pose challenges for vaccine uptake.

No silver bullet

Herd immunity would require 60-70% of the global population to be immune (billions of people). Even if a vaccine is perfectly effective, this will take years. Until then, the vast majority of the population will need to rely on treatments and testing for COVID-19. A vaccine is a major tool in the fight against this disease, but it cannot be the only one. Demand for effective treatments and convenient testing outstrips supply and should continue to do so into 2021 and beyond. Overall: a vaccine roll-out will take many months, while cases, hospitalisations and deaths continue to surge and, as such, little has changed with regards to the COVID-19 opportunity, despite this very positive news.

Stock implications

The report considers the price falls to stocks such as Synairgen (-39%), Avacta (-36%), genedrive (-38%), Omega Diagnostics (-25%) and Open Orphan (-9%) to offer good buying opportunities. Synairgen (420p TP): countries will still want to stockpile SNG001 as there is currently no broad spectrum antiviral and there is no data on how effective this vaccine is on elderly or sick people. Avacta (TP 310p) and genedrive (TP U/R): there is a continued need for rapid and convenient tests. Omega Diagnostics (TP U/R): antibody tests could be used to confirm immunity. Open Orphan (TP 28p): challenge studies could be used to perform head-to-head clinical trials between first generation and the eventual second generation COVID-19 vaccines.

If approved, Pfizer expects to produce 50m doses of the vaccine globally in 2020. The UK is due to receive 10m doses (enough for 5m people) by the end of the year, but the first distribution of a vaccine is unlikely until 2021. A further 30m doses are expected next year.

Speaking about the report, Mark Brewer, Director of Research for finnCap, commented: “While the results are very promising, we believe there was a large over-reaction in the market in response to the news. It should not have been unexpected – we hoped for positive results from vaccine manufacturers this month, and we hope there is more to come, as AstraZeneca-Oxford University and Moderna are also due to announce initial results this month, and overall there are 11 vaccines in Phase III testing.

“However, these early results do not diminish the urgent need for COVID-19 treatments and testing, which will still be required for years to come. That is why we consider the price falls to stocks such as Synairgen (-39%), Avacta (-36%), genedrive (-38%), Omega Diagnostics (- 25%) and Open Orphan (-9%) to offer good buying opportunities.

“For example, for Synairgen, countries will still want to stockpile SNG001 as there is currently no broad spectrum antiviral and there is no data on how effective the Pfizer/BioNTech vaccine is on elderly or sick people. For Avacta and genedrive, there is a continued need for rapid and convenient tests. For Omega Diagnostics, antibody tests could be used to confirm immunity. And for Open Orphan, challenge studies could be used to perform head-to-head clinical trials between first generation and the eventual second generation COVID-19 vaccines.”