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Are We There Yet: How the JNJ Vaccine Could Be the Answer

Since the pandemic started, we’ve had two extremely similar COVID-19 vaccines approved: the mRNA vaccines created by Moderna (MRNA) and Pfizer (PFE) / BioNTech (BNTX).

Now, there’s another coronavirus shot that gained FDA approval: Johnson & Johnson’s (JNJ) adenovirus jab.

In fact, JNJ’s candidate received a unanimous approval from the FDA—a first among the COVID-19 vaccine developers.

Results showed that JNJ’s shot has 66% effectivity at preventing coronavirus infections and 85% effective at blocking severe COVID-19 cases when allowed at least four weeks to take effect.

Taken at face value, the numbers from JNJ’s trials may not seem as impressive as the two-shot vaccines of Moderna or Pfizer, which both demonstrated efficacy results of over 94% in their 2020 reports.

However, it’s important to not make any conclusions based on incomplete data.

After all, drawing comparisons among different vaccine studies performed at different periods is practically comparing apples to oranges.

That’s why Dr. Anthony Fauci and other experts declared that they’ll just take whichever vaccine shot they could avail of.

Actually, the JNJ vaccine may be the ideal option for some people.

Since the JNJ vaccine shows less severe reactions compared to Pfizer and Moderna’s vaccines, this could be preferable for people who couldn’t tolerate the side effects.

Although the side effects of Pfizer and Moderna are temporary, some people need to take days off to recover. Sadly, not everyone has the luxury to do that.

The fact that it’s a single jab vaccine makes it an attractive option for young and healthy individuals, who can’t afford to go back to get a second shot.

It’s also less fragile and can be stored in a regular fridge for three months without the need for any hyper-cold storage system like the mRNA vaccines require. This would make it an attractive option for rural areas.

Plus, JNJ tested its candidate at the height of the pandemic. That means the numbers the company released could have been affected by the situation at the time.

Although JNJ’s vaccine does not completely get rid of the disease, it delivers on the promise of protecting the patients from the worst possible scenarios of COVID-19: hospitalization and death.

Basically, the JNJ vaccine is cheap to manufacture as well as pretty simple to administer and get.

People can get some dependable viral protection within a span of four weeks, without the need to return for a second jab.

As a bonus, the JNJ vaccine could even protect you better from the new variants that are starting to spread fast.

Despite the $410 billion market capitalization of JNJ though, it looks like the New-Jersey-based giant isn’t up for the massive rollout the world expects from its vaccine.

This is where Joe Biden steps in.

With the goal of having every American vaccinated by the end of May, Biden tapped Merck—a fierce rival of JNJ—to help out with the production.

While Merck’s own COVID-19 vaccine program was shut down, this company remains the leading vaccine developer across the globe.

This means it knows a thing or two about fast-moving mass production during outbreaks—and this is exactly the kind of expertise JNJ needs.

If things work out, JNJ should be able to produce 94 million doses by the end of May—roughly 7 million doses ahead of what’s stipulated in its contract—and the full 100 million by June.

This arrangement isn’t anything new. Since the COVID-19 pandemic, competitors have been joining forces to find ways to put an end to the crisis.

In January this year, Sanofi (SNY) announced that it would be collaborating with BioNTech to help manufacture additional doses of the COVID-19 vaccine it developed with Pfizer.

When JNJ receives authorization from the EU as well, Sanofi would also be there to help with the production.

The JNJ vaccine could just be the escape hatch we’ve all been waiting for since the pandemic started.

With this FDA authorization, we’d be able to vaccinate millions more at a breakneck speed.

February 25, 2021

Biotech Letter

Mad Hedge Biotech & Healthcare Letter
February 25, 2021
Fiat Lux

FEATURED TRADE:

(AN UNDER THE RADAR BIOPHARMA PLAY)
(ALNY), (PFE), (BNTX), (MRNA), (NVS), (GME), (BX)

An Under the Radar Biopharma Play

Biotech Letter

Financial markets have been incredibly volatile in the past months primarily due to the COVID-19 pandemic.

The situation was made even more unpredictable by the GameStop (GME) and bitcoin drama.

So it’s expected that investors are looking for guidance in this time of instability, and a good place to start is the Blackstone Group (BX).

Considering that the basic philosophy of this company is to “buy, fix, and sell,” it’s safe to say that Blackstone only puts its money, time, and effort in promising investments.

Around the time of the pandemic outbreak last year, Blackstone poured in roughly $2 billion investment in a biopharmaceutical company, Alnylam Pharmaceuticals (ALNY).

While Alnylam may be virtually unknown to the public, this is actually a promising company with an impressive backstory.

Founded in 2002, Alnylam is mainly known for its technology, RNAi or RNA interference.

This is a gene-silencing technique, which was discovered by Andrew Fire and Craig Mello back in 1998. The two won the Nobel Prize for it in 2006.

Even before the Nobel, Alnylam has already seen the potential of this technology and started developing it in the early 2000s.

For decades, this work had been underappreciated—up until the COVID-19 pandemic.

This is because the leading vaccine candidates right now, developed by Pfizer (PFE)-BioNTech (BNTX) and Moderna (MRNA), are both mRNA-based drugs.

Although the vaccine developers customized the technology, they still used the same delivery technique that Alnylam developed.

Clearly, there has been a lot of piggybacking on this discovery.

While Moderna, Pfizer, and BioNTech used the technology to create RNA-based drugs for the COVID-19 vaccines, Alnylam decided to utilize it to develop treatments for other diseases.

The first approval was hereditary transthyretin-mediated amyloidosis drug Onpattro, launched in 2018.

As of 2020, sales of this high-priced therapy reached roughly $300 million, ensuring that it was on pace with the company’s target.

Alnylam’s second approved treatment is ultra-rare genetic disease drug Givlaari, which hit the market early last year.

By the third quarter of 2020, sales of this acute hepatic porphyria drug climbed by $67 million despite the effects of the pandemic.

In the next decade, Givlaari is estimated to peak at $550 million annually.

By 2025, yearly sales for Givlaari and Onpattro are projected to hit roughly $1.5 billion in total.

Riding this momentum, Alnylam has been collaborating with Sanofi (SNY) to develop another rare disease drug, Vutrisiran. This could rival the company’s own Onpattro.

Aside from Vutsiriran, Alnylam and Sanofi are also working on a potential novel hemophilia treatment, Fitusiran.

The latest treatment to gain approval is rare kidney disorder drug Oxlumo, which is estimated to net Alnylam roughly $380,000 per patient annually.

While this may be a hefty price tag, it’s expected that insurance companies and governments will be the ones to ultimately shell out the money for these rare disease drugs.

Before 2021 ends, Alnylam is expected to gain FDA approval for another potential blockbuster drug, Inclisiran. This is a cholesterol-fighting treatment, which is a work in progress with Novartis (NVS).

Over the past decade, Blackstone has been quietly stashing multi-billion-dollar stakes in the life sciences.

In 2020 alone, the company poured roughly $16 billion into the industry. This is its largest investment theme for the entire year.

While this business has yet to make a dent on Blackstone’s $600 billion assets, the attention that the companies have been getting is worth noting—and a good place to start is Alnylam.

For a better context of its potential, Blackstone invested $3 billion in a dating app called Bumble (BMBL) back in 2018.

Fast forward to 2021, this company is now worth approximately $14 billion following its recent IPO.

With a market capitalization of roughly $15 billion and for a company that’s not anticipated to generate over $1 billion in annual revenue until 2022, Alnylam’s current price might be considered high by some investors.

Looking at its pipeline though, which is filled with potential blockbusters, and its track record that shows that the company definitely knows how to launch new drugs to the market, I believe Alnylam stock is worth considering right now.

alnylam

February 23, 2021

Biotech Letter

Mad Hedge Biotech & Healthcare Letter
February 23, 2021
Fiat Lux

FEATURED TRADE:

(IS THIS THE YEAR OF BIOTECH UPSTARTS?)
(PFE), (GSK), (MRK), (SNY), (MRNA), (BNTX), (NVAX), (AZN)

Is This the Year of Biotech Upstarts?

Biotech Letter

Vaccines have long been shoved to a sleepy little corner of the biopharmaceutical world, ruled over by a handful of companies that cater to billions of dollars’ worth of demand for vaccines every year, undisturbed by newcomers.

However, the COVID-19 pandemic has made this particular corner of the industry a tad more crowded.

While there’s still no clear picture of how the next stage of the efforts to vaccinate the majority of the human population against COVID-19 will work out, what’s evident is that the dominance of the “big four” publicly-traded vaccine developers will be challenged.

That means the battle for supremacy in the vaccine market will no longer be confined within Pfizer (PFE), GlaxoSmithKline (GSK), Merck (MRK), and Sanofi (SNY).

As we’ve witnessed, the COVID-19 pandemic has provided entry points for new names in the industry, such as Moderna (MRNA), BioNTech (BNTX), and Novavax (NVAX).

By the second half of 2021, Novavax and its partners are targeting to supply 150 million doses of their vaccine, while Moderna says it would be distributing at least 600 million doses this year alone—a number that could reach a billion given the right partners in the future.

Those numbers are on par with global-level vaccine production—with Novavax and Moderna quickly gaining steam and catching up with the big players in the industry.

For context, Sanofi made 250 million doses of its own flu vaccine for the 2021 flu season.

Given that Novavax also plans to release its own flu vaccine combined with the smaller company’s momentum, Sanofi is looking at a long-term rival in this sector.

Aside from offering these smaller biotechs opportunities for growth in terms of business, the pandemic has fast-tracked the advent of next-generation technologies in the industry.

Both Pfizer and Moderna have been approved to use the pioneering messenger RNA technology to develop their COVID-19 vaccine candidates.

Apart from mRNA technology, a similarly revolutionary approach is being explored by Johnson & Johnson (JNJ): viral vector technology.

Meanwhile, AstraZeneca (AZN) and its partner Oxford University came up with their own viral vector vaccine, which has been approved in Europe.

As for Novavax, this Maryland-based company has decided to use the more conventional approach utilizing a protein subunit vaccine.

Although the exact size of the COVID-19 market is difficult to predict, it’s safe to say that it will be massive.

In terms of who could eventually get the lion’s share of the market, Pfizer is currently leading at the moment based on the government contracts the company managed to secure.

Pfizer estimates $15 billion in revenue from the COVID-19 vaccine in 2021—a number that’s two and a half times higher than its best-selling drug in 2020.

Moderna projects at least $10 billion in COVID-19 vaccine sales, while Novavax anticipates roughly $3.4 billion this year.

In the future though, there’s strong indication that AstraZeneca and JNJ will be vying for dominance for mass-market contracts. This is primarily because of their one-dose vaccine promise and the convenient storage requirements their candidates offer.

Another massive growth prospect for this vaccine is if the need for yearly boosters sticks around. This market would not only be lucrative for smaller companies like Novavax and Moderna, but even for the bigger vaccine players.

Considering the potential of this market, the current leaders of the COVID-19 vaccine race shouldn’t get too comfortable.

In fact, Sanofi and GlaxoSmithKline have already joined forces to create their own COVID-19 vaccine candidate.

So while Pfizer, Moderna, and AstraZeneca already have their products out the door, other vaccine developers still consider themselves in the running to topple them from their perch.

February 4, 2021

Biotech Letter

Mad Hedge Biotech & Healthcare Letter
February 4, 2021
Fiat Lux

FEATURED TRADE:

(IS THIS THE NEXT BIOTECH DARLING?)
(VXRT), (MRNA), (PFE), (BNTX), (AZN), (NVAX)

Is This the Next Biotech Darling?

Biotech Letter

If you were given the chance to choose, how would you prefer to get vaccinated against COVID-19: by getting an injection or by taking a pill?

For a lot of people, it’s a no-brainer to choose the pill—and one biotechnology company has been working hard to turn that into a reality: Vaxart (VXRT).

Last January 2020, Vaxart was only a micro-cap stock focused on developing a lineup of oral-tablet vaccines as treatments for viral infections.

When news broke that the company has been developing a COVID-19 vaccine in the form of a pill, its shares rocketed by over 1,250% in the past 12 months.

From a micro-cap stock trading for as little as $0.70 last year, Vaxart has been trading somewhere between $21 to $23 per share since 2021 started.

In fact, Vaxart even managed to outpace other biotechs already leading in the coronavirus market like Pfizer’s (PFE) partner BioNTech (BNTX), and Moderna (MRNA).

If Vaxart’s vaccine, VXA-CoV2-1, receives regulatory approval, then its COVID-19 vaccine candidate offers key advantages over its rivals.

The first is that VXA-CoV2-1 comes in the form of pills, making it a more convenient and generally preferable option for a lot of patients.

The second is that VXA-CoV2-1 can be stored at room temperature, which eliminates any type of special handling unlike the vaccines of Pfizer-BioNTech, Moderna, and even AstraZeneca (AZN).

The third is that you can take VXA-CoV2-1 on your own. Since these are pills, there is no need for a healthcare worker to administer the COVID-19 vaccine.

This means that VXA-CoV2-1 can be delivered for at-home use.

These advantages effectively eliminate barriers in the healthcare systems, making it easier and more convenient to purchase and deploy VXA-CoV2-1.

Looking at all potential markets, Vaxart could find a niche in underdeveloped regions.

On top of all these conveniences, the technology used to develop VXA-CoV2-1 can also be utilized in creating an oral vaccine against other diseases.

So far, VXA-CoV2-1 is only in Phase 1 of its clinical trials, with new data expected to be released this February.

Prior to this, results showed that VXA-CoV2-1 eased lung viral load and alleviated lung inflammation in hamsters that were infected with COVID-19.

While all these definitely sound amazing, everything is still in very early stages. Plus, results from hamster studies are a far cry from showing efficacy in human beings.

This makes the Phase 1 data release a sort of make-or-break event for Vaxart.

Other than its COVID-19 vaccine candidate, Vaxart has been working on an oral vaccine for influenza as well.

This product is currently undergoing Phase 2 clinical trials and has so far surpassed the efficacy of Sanofi’s (SNY) Fluzone by 8%.

In terms of pipeline growth, Vaxart is still no match to Moderna, which has developed technology that could cure cancer and other rare diseases. It’s probably closer to Novavax (NVAX), which is also working on an influenza vaccine.

So, is Vaxart the new darling of the biotech world?

It definitely has the potential.

However, its success hinges on everything aligning perfectly. But as a certain guy named Murphy has pointed out, that oftentimes does not happen.

Vaxart is subject to forces beyond its control.

There’s no absolute guarantee that its COVID-19 vaccine candidate will fare well in all the clinical trials.

Vaxart has a viable path of delivering humongous gains this year. However, this path is also riddled with lots of risks.

It is a highly risky stock and is best left to aggressive investors.

Moreover, Vaxart is in a precarious position right now, wherein a failed clinical result in human studies would be devastating for the shares.

On the other side, a positive human data readout would send the shares soaring in the next months.

Truth be told, sky would be the limit for Vaxart’s stock price if FDA actually approves its oral vaccine candidate.

Undoubtedly, Vaxart will be at the center of debates between short-sellers and passionate bulls throughout 2021. The bottom line is that will always be a trade-off of risk and reward in any type of investing.

If you have faith in Vaxart’s science and are confident that you have the stomach for a crazy roller-coaster ride, then you can give this biotech stock a chance.

Otherwise, play it safe and invest in less volatile biotechnology stocks instead.

vaxart

January 28, 2021

Biotech Letter

Mad Hedge Biotech & Healthcare Letter
January 28, 2021
Fiat Lux

FEATURED TRADE:

(WATCH OUT FOR THESE BUYOUT STOCKS)
(TBIO), (MRNA), (PFE), (BNTX), (SNY), (BLUE), (BMY)

Watch Out for These Buyout Stocks

Biotech Letter

Many predictions this 2021 probably won’t pan out. However, here’s a pretty safe bet: we will see a number of biotechnology company acquisitions this year.

Although it’s not easy to accurately forecast which biotechnology companies will be involved in these deals, there is a handful that qualifies as prime acquisition targets.

One of the top biotech buyout candidates in my radar this year is Translate Bio (TBIO).

Thanks to the massive success of the COVID-19 programs of Moderna (MRNA), Pfizer (PFE), and BioNTech (BNTX), a spotlight has been cast on the benefits of the messenger RNA (mRNA) technology.

That’s why I wouldn’t be surprised if bigger players in the healthcare industry decide to scoop up smaller players to stake a claim in this quickly growing space.

Among all the small-cap biotechs in play, Translate Bio is easily one of the top prospects.

Before Moderna and BioNTech hogged the spotlight with their mRNA-based COVID-19 vaccines, Translate Bio was actually one of the strong contenders in the race. Unfortunately, it failed to keep up with its peers and is now lagging well behind the leaders.

On the flip side, the attention that mRNA technology has been getting these days seemed to have strengthened the confidence of investors in the technology – an effect that Translate Bio greatly benefited from in the past months.

Despite its lagging performance in the COVID-19 race, Translate Bio has been making significant progress with its work with partner Sanofi (SNY) on their own candidate, MRT5500. If all goes well, then the product should be out by the first quarter of 2021.

Apart from that, the two have been focusing on different vaccine candidates for other viral and bacterial diseases.

Translate Bio’s pipeline also includes treatments targeting another lucrative market using the same MRT platform technology as MRT5500: cystic fibrosis (CF).

The company’s CF treatment has been causing excitement among investors because instead of offering invasive therapy, this option offers patients an inhaled version of the mRNA drug as treatment.

Moreover, the MRT platform technology of Translate Bio could be expanded to cover more than just CF – a promising diversification that encouraged big investors like Sanofi to continuously pour money into collaborations with this Massachusetts-based biotech.

As mRNA technology gains more traction, Sanofi might even reevaluate its relationship with Translate Bio and decide that it wants more than just a collaboration.

With the smaller biotech company’s modest market capitalization of only a little over $1.7 billion, an acquisition could be on the table sooner rather than later.

Another potential buyout candidate is Bluebird bio (BLUE).

Unlike its contemporaries in the biotech space, Bluebird shares plunged by nearly 50% in 2020.

Although the company offers a promising upside potential, it can’t seem to generate sufficient enthusiasm to take part in the biotech sector’s rally last year.

In fact, Blue stock continued to hover near its 52-week low despite several gene and cell therapy tickers reaching all-time highs.

While that’s obviously bad news for Bluebird shareholders, I think this makes the company an even more attractive acquisition candidate.

I think it’s important to determine the reasons behind Bluebird’s abysmal 2020 performance.

The stock had a rocky start last year, with the COVID-19 pandemic exacerbating its overall meltdown.

One of Blue’s major roadblock was its failure to secure approval from the FDA for its multiple myeloma treatment, which it has been working on with Bristol Myers Squibb (BMY).

Then, it delayed its submission for approval of its sickle cell disease treatment LentiGlobin. This was initially set for the second half of 2021 but was pushed to late 2022.

The main takeaway from this streak of negative updates is that Blue still doesn’t have its act together when it comes to dealing with regulatory approval processes.

Regardless, the potential of this biotech’s pipeline remains impressive.

Apart from its work with Bristol and LentiGlobin, Bluebird has been working on a late-stage candidate for treatment of a rare metabolic disorder called cerebral adrenoleukodystrophy with Lenti-D.

Prior to its partnership with Bristol, Bluebird was actually partnered with Celgene.

When Celgene was bought by Bristol in 2019, the bigger company continued the collaboration with Blue and expanded the partnership to cover more genetic disorders and extend to oncology treatments.

Due to the setbacks, Bluebird’s market capitalization now hovers somewhere near $3 billion.

Given all these pipeline candidates and its future plans, I suspect it wouldn’t take long before a major player takes notice of this attractive valuation and puts this bird in a cage.

Overall, both Translate Bio and Bluebird are solid companies in the biotechnology space.

While the COVID-19 pandemic slowed down some of their progress, the products in their pipelines could yield substantial value to interested acquisition partners.

January 19, 2021

Biotech Letter

Mad Hedge Biotech & Healthcare Letter
January 19, 2021
Fiat Lux

FEATURED TRADE:

(CAN NOVAVAX EXTEND ITS WINNING STREAK?)
(NVAX), (MRNA), (PFE), (AZN), (BNTX), (BTC)

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