2020 has been marked by a global coronavirus pandemic, and local governmental responses to the disease. COVID-19 began spreading in the end of 2019 in the chinese province of Hubei. It was declared a global pandemic by WHO on January 30th, and currently it’s human toll stands at 18 million diagnosed cases, and over 701K deaths. The economic impact has been tremendous. With a -9.5% quarterly GDP change, Q2 of 2020 has registered the steepest drop in US economic output in history. Consumer spending, two-thirds of the US economy, had its biggest decline in April. Even when businesses reopen all over the country, it is clear that consumer trust requires more than distance-sanitary measures. A successful COVID-19 vaccine would restore confidence in businesses, the economy, and bring our normal lives back..
There are currently dozens of groups racing to the development of a successful COVID-19. A complicated task due to the low immune signature of the disease, and the complexity of dealing with the coronavirus family of pathogens. Many of these studies are at a level of pre-clinical research thus I’ll focus exclusively on the main players currently in clinical trials.
The US government has selected three vaccine candidates to fund their Phase 3 trials through Operation Warp Speed:
Moderna (NASDAQ: MRNA) : mRNA-1273 will be tested in 30k high risk patients beginning July 2020. MRNA has seen a stock surge of over 300% since the beginning of 2020. It’s positive results in pre-clinical trials saw investors rally around it mid-May, reaching a peak of $94.85 USD mid-July. On top of a Q2 2020 increase in revenue, a deal with the Swiss government is currently in the works.
AstraZeneca (NASDAQ: AZN) : AZD1222 will conduct adult and pediatric trials. Also received $1B in may from BARDA for development, production, and delivery of 400K doses. AZN is a big player in pharma. Stock value has been rising steadily for the last 10 years (145%),and they keep consistently beating expected earnings. Their revenue comes from a high number of products including drugs, vaccines, devices, and tests. AZN is not an all-eggs-in-one-basket company. They have partnered with the University of Oxford, and the multinational health and research analysis giant IQV.
Pfizer (NASDAQ: PFE) & BioNTech (NASDAQ: BNTX) : The collaboration vaccine BNT162 is currently being tested at Phases 1/2 in Germany. In the US the drug was designated FDA Fast Track and is currently recruiting participants for trails beginning September 2020. PFE has been able to rebound from the 2008 crisis, and sits at the top of market share for pharmaceutical companies. BNTX IPO raised $150M in October 2019, and their partnership announcement with PFE has resulted in a 150% increase in stock price. Currently both companies are negotiating a deal to supply Canada with a vaccine.
Other players such as NVAX, GSK, and INO, currently have vaccines in Phase 1 trials generating quite the enthusiasm in investors.
Conclusion
The COVID-19 vaccine market will not be a winner-takes-all type situation. It should become something similar to the flu vaccine market in which a number of companies dominate, and their continual investment on R&D translates into a stable market share. This will be a race won by the old dogs, but with a really interesting competition by mid to minor players rallying investors, with real opportunities to jump in the action.
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