(BNTX) Archives - Page 15 of 16 - Mad Hedge Fund Trader

AstraZeneca’s Bump in the Road

Moderna (MRNA) was the first company to test its COVID-19 vaccine candidate on humans. However, AstraZeneca (AZN) and its partner Oxford University have been setting out the most aggressive timelines.

In fact, AstraZeneca sealed deals with the promise of delivering vaccine results as early as September.

The possibility of that happening, already precariously hanging by a thread, was completely eliminated earlier this month when the company halted its COVID-19 vaccine program after a subject showed severe adverse reactions.

Needless to say, news of AstraZeneca’s suspension of its late-stage 30,000-patient trial rattled the markets.

However, it looks like investors are simply shaking off the panic as other COVID-19 vaccine stocks continue to gain momentum.

In fact, even AstraZeneca only suffered a 2% slide following the announcement.

Shares of its COVID-19 rivals Pfizer (PFE), Merck (MRK), Johnson & Johnson (JNJ) went up 1% each, while GlaxoSmithKline (GSK) and Sanofi (SNY) rose 2%.

Bigger jumps were seen in smaller biotechnology companies with Moderna and CureVac (CVAC) being 4% higher and Novavax (NVAX), Inovio (INO), and BioNTech (BNTX) climbing 6%.

Still, a lot is riding on AstraZeneca’s vaccine candidate. The company has secured more contracts compared to its rivals.

To date, AstraZeneca has disclosed deals to supply roughly 3 billion doses to different nations including the US, Europe, Australia, Japan, Brazil, Latin America, and even China.

Its leading competitors, Moderna and Pfizer, have only managed to commit a small fraction of AstraZeneca’s supply.

Although AstraZeneca’s decision would cause some delay, experts assure the public that this is a normal occurrence in the vaccine development process.

It is actually a good sign especially given the fast-tracked timelines for the COVID-19 programs.

This voluntary pause from AstraZeneca means that the standards for vaccine development are still stringently followed by the developers despite the tight deadlines and competition.

A third-party safety board was already assigned to review AstraZeneca’s case, with the company expecting results in the next weeks.

So, what happens next?

There are few possible outcomes of this scenario. The ideal result would be for the board to find that the adverse effect has no connection to AstraZeneca’s vaccine candidate.

If this is the case, then the company can restart trials as early as next week. Although it obviously suffered a delay, AstraZeneca says it is still on track and can submit efficacy data before 2020 ends.

If everything else falls into place and from a manufacturing standpoint, AstraZeneca can still deliver a vaccine by the end of the year or early 2021.

If the adverse effect is caused by the vaccine though, then it could spell trouble not only for AstraZeneca but also for some of its rivals using the same technology.

The company utilized a neutralized virus for delivery, which is the same method used by other developers like Johnson & Johnson.

In comparison, Moderna and Pfizer’s vaccine candidates used a new technique involving messenger-RNA. This method stimulates a person’s body to produce a protein, which can help build immunity against the coronavirus.

The worst-case scenario is that if the problem turns out to be an immune reaction to the coronavirus fragments.

This would set back all the COVID-19 vaccine developers because it is the common element among them.

Although the COVID-19 vaccine candidate is a high-value product, AstraZeneca remains poised to prosper no matter what happens as a result of the pandemic or even the overall financial market.

The company is consistently generating strong revenue growth. In particular, its cancer lineup of non-small cell lung cancer treatments Tagriss and Imfinzi, and ovarian cancer therapy Lynparza have been showing remarkable momentum amid the crisis.

However, it is AstraZeneca’s pipeline that makes this stock impressive.

So far, the company has 166 programs that are under clinical development. Of those, 24 have already reached late-stage trials.

What’s even more exciting is that 9 of these late-stage studies are for new drugs. Meanwhile, the remaining 15 are additional approvals for expanded indications of existing products.

AstraZeneca offers one of the most promising product portfolios and clinical pipelines in the healthcare and biotechnology industry. It also provides impressive shareholder reward programs.

Most importantly, this single COVID-19 vaccine candidate is definitely not a make-or-break type of development for the company – not by a very long shot.

Therefore, bargain hunters may want to capitalize on AstraZeneca’s shares on any weakness resulting from this trial suspension.

It's Crunch Time for COVID-19 Vaccine Developers

Biotech Letter

Mark your calendars because the world is about to find out whether the leading candidates of the COVID-19 vaccine race will be effective as early as October.

Other than saving lives in this pandemic, also hinged on the results is over $100 billion in investors’ money – an amount that reflects just how much value the stock market is putting on the COVID-19 vaccine candidates under development today.

One of the leading companies in the race is Johnson & Johnson (JNJ).

With a market capitalization of almost $400 billion, many believe that this biopharmaceutical giant will soon be hailed as the king of the coronavirus stock list.

What we know so far is that JNJ’s subsidiary, called Janssen Vaccines, is set to launch a massive-scale Phase 3 study of its COVID-19 vaccine candidate, A26.COV2-S, this September.

The company’s study, which will be randomized, double-blind, and placebo-controlled, is expected to involve approximately 60,000 participants suffering from moderate to severe cases of COVID-19.

The move to include 60,000 participants is seen as a competitive advantage for JNJ because this is double the usual late-stage volunteer number.

For comparison, Moderna’s (MRNA) mRNA-1273 as well as Pfizer (PFE) and BioNTech’s (BNTX) BNT162b2 will only target a maximum of 30,000 patients each in their trials.

On top of the more expansive trial coverage, JNJ has another advantage that could help it pull ahead of the pack.

During the preclinical testing of Ad26.COV2-S on primates, the vaccine candidate showed that a single dose could be enough to fight off the virus.

In contrast, the candidates from other COVID-19 vaccine developers like AstraZeneca (AZN), Pfizer, and Moderna require two doses to trigger a similar response.

While the well-being of every man, woman, and child hangs on the success of the COVID-19 trials, concerns have been raised that the assessment for these candidates might be compromised because of the upcoming US presidential election.

However, the leading COVID-19 developers assured people that it won’t be the case.

Apart from JNJ, Pfizer, Moderna, AstraZeneca, other vaccine makers like GlaxoSmithKline (GSK), Sanofi (SNY), and Regeneron (REGN) plan to issue statements that no candidate will be submitted without extensive data on its efficacy and safety.

Most investors are focused on the COVID-19 stocks these days, and who can blame them?

Sales of the vaccines in 2021 alone could reach $20 billion per company. This is massive profit even for Big Pharma standards.

In fact, this amount is higher than the projected sales of today’s current top-selling drug, Humira from AbbVie (ABBV), which is expected to clock roughly $19.6 billion in the same period.

However, the COVID-19 vaccines will only be profitable for as long as there is a pandemic. If this disease becomes a non-recurring sickness, then the vaccines will no longer be as profitable in the long run.

This is why it’s crucial to review the core operations of a company and determine its capacity to keep generating revenue and profits while also maintaining a strong balance sheet and returning value to its investors.

JNJ is a great example of this type of business.

Outside its COVID-19 efforts, the company has been diversifying its portfolio. Its latest move is the $6.5 billion acquisition of Momenta Pharmaceuticals (MNTA), marking the biopharmaceutical titan’s expansion into the immunology sector.

One of the most significant assets JNJ acquired from this deal is Nipocalimab, which is an incredibly promising first-in-class autoimmune disease treatment.

This drug could be the answer to rare and life-threatening blood disorders, such as hemolytic disease, which affects newborns and babies. To date, there are roughly 195 million individuals suffering from this condition worldwide.

Throughout its history, JNJ has proven itself to be a stable company even in the most unstable market conditions.

It has a reliable growth record and a healthy cash flow, which would be valuable in acquiring bolt-on companies, creating new drugs, and boosting the dividend every year.

JNJ has managed to increase dividends annually for 58 years now, with its most recent dividend raise reaching 6.3% just last April. Its stock currently yields 2.7%.

More importantly, JNJ offers an impressive biotechnology pipeline. With an incredible history of over 130 years, this stock is definitely one for keeps.

September 1, 2020

Biotech Letter

Mad Hedge Biotech & Healthcare Letter
September 1, 2020
Fiat Lux

Featured Trade:

(RACE TO THE FINISH LINE)
(PFE), (BNTX), (MRNA), (AZN), (INO), (ZTS), (MYL)

Race to the Finish Line

Biotech Letter

One of the leading companies in the COVID-19 vaccine race is getting closer to the finish line.

Pfizer (PFE) shocked the scientific community when it announced that it would be ready to submit its COVID-19 vaccine candidate, BNT162b2, for FDA approval by October.

The company said that it is now more than 50% done with the recruitment for its Phase 3 clinical trial, which requires 30,000 volunteers.

Earlier this year, Pfizer and its vaccine partner BioNTech (BNTX) were included in the US government’s Operation Warp Speed project. Although the two rejected government funding, their candidate is still included in the fast-track priority list of the FDA.

To date, the US government already secured a contract with Pfizer and BioNTech for 600 million doses of their vaccine, with the initial payment of $1.95 billion for the first 100 million doses.

Other countries across the globe have also shown faith in the science of Pfizer.

The UK government completed a deal with Pfizer for 30 million doses, while Japan ordered 120 million doses.

Since it has been preparing its manufacturing facilities while also conducting its trials, Pfizer is confident that it can produce 1.3 billion doses of BNT162b2 in 2021.

Given this timeline, it is possible for the company to launch its COVID-19 vaccine to the market by the fourth quarter of 2020, with peak sales of the product reaching $1.7 billion in 2021.

Revenue for BNT162b2 is expected to slide to $850 million by 2023, with the vaccine raking in an average of $500 million to $600 million in annual sales by then.

However, there is no such thing as a perfect solution.

A potential competitive disadvantage of Pfizer’s vaccine candidate lies in its storage requirements, which entail a storage temperature of −94°F.

While tertiary hospitals and laboratories can meet this requirement, it would make it difficult for traditional offices or pharmacies to store the product.

This shortcoming might prompt other governments and private institutions to consider other vaccine candidates with simpler storage requirements.

Although the results have yet to be released, early data show that competitors like Moderna (MRNA), AstraZeneca (AZN), and Inovio Pharmaceutical (INO) might offer less complicated solutions.

Outside its widely publicized COVID-19 vaccine efforts, Pfizer has been working on additional spinoffs to boost and diversify its revenue stream.

Investors of the company would agree that Pfizer is the kingpin of spinoffs.

A prime example of this is its animal healthcare Zoetis (ZTS) spinoff, which was established in 2013. Since then, the investors have experienced impressive returns with over 289% yields.

Now, Pfizer is aiming to replicate this feat with the $195 billion merger of its own off-patent and generic drugs unit Upjohn with Pennsylvania-based company Mylan (MYL).

The two companies are slated to form a mega-company, called Viatris, where Pfizer stakeholders will also receive shares.

Looking at its portfolio and pipeline candidates, Viatris is projected to generate approximately $19 billion to $20 billion in annual revenue and record $4 billion in free cash flow.

On top of the Viatris spinoff, Pfizer is also working on the Nasdaq IPO of Cerevel Therapeutics.

This is an interesting move from Pfizer since Cerevel is a neuroscience company, which focuses on diseases of the central nervous system like Alzheimer’s, Parkinson’s, and epilepsy.

Pfizer owns 25% stake of the neuro company while Bain Capital holds 75%. The two established Cerevel in 2018.

Just last July, Cerevel announced its merger with Arya Sciences Acquisition Corp II.

When the merger is finalized, the new company will be called Cerevel Therapeutics Holdings and will be under the ticker symbol “CERE” in Nasdaq. The deal is expected to be completed by the fourth quarter of 2020.

Although it will be a relatively unknown and new company, Cerevel is expected to receive at least $445 million to use for its growth by the end of the year.

Needless to say, this is expected to be another “Zoetis-in-the-making” strategy from Pfizer.

For 2020, Pfizer raised its revenue guidance and estimates that it can generate somewhere between $48.6 billion and $50.6 billion while recording an earnings per share of roughly $2.85 and $2.95.

Looking at its balance sheet, Pfizer has proven itself capable of weathering one of the most debilitating downturns since The Great Depression.

In fact, the company amassed revenue of $12 billion and showed off a respectable 12% operational growth in its biopharma unit in the first three months of this year.

In its second quarter earnings report, when the COVID-19 pandemic was already well underway, Pfizer raked in $11.8 billion in revenue.

With all the publicity surrounding the COVID-19 vaccine efforts, it is understandable that investors are buying at artificially high prices. However, Pfizer remains incredibly undervalued.

Pfizer’s star power would inevitably surge if BNT162b2 proves to be safe and effective. Even without the vaccine though, the company’s diverse portfolio and impressive acquisition strategies already make it a great buy.

Plus, its healthy dividend, which yields approximately 3.9%, is no doubt the icing on the cake for this incredibly undervalued stock.

August 25, 2020

Biotech Letter

Mad Hedge Biotech & Healthcare Letter
August 25, 2020
Fiat Lux

Featured Trade:

(LET THE VACCINE PRICING WARS BEGIN)
(MRNA), (MRK), (PFE), (BNTX), (AZN), (JNJ), (NVAX), (SNY)

Let the Vaccine Pricing Wars Begin

Biotech Letter

The COVID-19 vaccine race is winding down to its final lap, with at least seven candidates already undergoing Phase 3 trials.

Now, one question inevitably arises: How much will these vaccines cost?

Moderna (MRNA), one of the frontrunners in this race, revealed that its vaccine, mRNA-1273. will be priced somewhere between $32 and $37 for each dose.

The moment this pricing was announced, health advocates were up in arms to point out the high price of the vaccine especially with the funding Moderna received from the US government.

However, the company clarified that this would only apply to “small-volume” transactions.

According to Moderna, the pricing for their coronavirus vaccine should be viewed in two phases: the pandemic and the endemic periods.

During the pandemic period, the coronavirus vaccine would be given a price “well below” its actual value. The pricing will change and eventually be more in line “with other innovative commercial vaccines” when the crucial period passes.

For reference, flu shots are typically priced somewhere between $50 to $120 depending on the clinic while a single-dose HPV vaccine from companies like Merck (MRK) can cost up to $235.

Despite the clamor to further investigate this pricing scheme, Moderna sealed another deal with the US government worth $1.525 billion if the company succeeds in meeting its promised timeline.

This will translate to roughly $100 million doses.

It also stands to gain an additional $8.125 billion in follow-up doses plus the $300 million bonus if it can score an FDA approval by January 31, 2021.

Another frontrunner in this coronavirus vaccine race is Pfizer (PFE).

Among the healthcare and biotechnology companies working on a vaccine, Pfizer and its German partner BioNTech (BNTX) are reported to have the most lucrative contract with the federal government to date.

The company recently sealed a $1.95 billion deal for 100 million doses. This puts Pfizer’s coronavirus vaccine at roughly $20 per dose.

Both vaccine candidates from Pfizer and Moderna require two doses.

In comparison, Johnson & Johnson (JNJ) has a “one-and-done” vaccine candidate. That is, the Ad26.COV2-S showed potential that it could only require a single dose.

This is definitely a competitive edge as it will eventually be a cheaper and more convenient alternative to the two-dose vaccine offered by its competitors.

In terms of pricing, JNJ recently landed a $1 billion contract with the US government to deliver 100 million doses. This translates to $10 per dose.

However, AstraZeneca (AZN) appears to be the favored candidate by the US government.

In fact, recent reports suggest that the Trump administration is considering bypassing normal regulatory standards in the UK to fast track the delivery of the vaccine candidate to the US — all before election day.

What we know so far is that AstraZeneca, which is developing its vaccine in collaboration with the University of Oxford, signed a deal with the US government worth $1.2 billion.

This will amount to 300 million doses of their vaccine candidate, which puts the cost of each dose to roughly $4. At this price point, AstraZeneca offers the cheapest option.

Meanwhile, small-cap biotechnology company Novavax (NVAX) recently signed a similar deal with the government.

The Maryland-based company agreed to manufacture 100 million doses of its vaccine for $1.6 billion. This works out to approximately $16 per dose.

Next to Moderna, Novavax’s journey this year has been considered a “Cinderella story” by a lot of investors.

The company ended 2019 all banged up, with the biotechnology stock falling by almost 90%, thanks to its failed respiratory syncytial virus (RSV) vaccine candidate.

However, Novavax rose from the ashes following the encouraging results of its late-stage study for NanoFlu, another vaccine candidate.

By March 2020, Novavax’s flu vaccine released promising data that put NanoFlu in direct competition against Sanofi’s (SNY) flu vaccine Fluzone Quadrivalent.

Riding the momentum of their success with NanoFlu, Novavax joined the COVID-19 vaccine race with NVX‑CoV2373.

While companies like Pfizer, Moderna, JNJ, and AstraZeneca have been gaining media attention, an increasing number of health experts and analysts are claiming that Novavax’s candidate might just be the best in class.

Outside the companies under Trump’s Operation Warp Speed, China’s state-owned company, Sinopharm, also announced the pricing for its COVID-19 vaccine candidates.

The pricing is quite higher than those put forward by other vaccine developers, with the Beijing company quoting $145 for two doses.

Aside from China, Russia also has a vaccine candidate expected to be out in the market soon.

Vladimir Putin claims that Russia’s coronavirus vaccine candidate is similar to the one created by AstraZeneca and Oxford University.

No information has been given on either the results of the vaccine’s late-stage trials or its pricing.

To date, the World Health Organization (WHO) has recorded 7 vaccine candidates undergoing Phase 3 clinical trials, while there are 15 more going through Phase 2 expanded safety trials.

An additional 25 candidates are currently under Phase 1 small-scale trials plus another 138 pre-clinical candidates slated for human trials soon.

The development and success of at least one coronavirus would undoubtedly reverse the economic and financial damage brought by the pandemic. Hopefully, that time will come soon.

August 18, 2020

Biotech Letter

Mad Hedge Biotech & Healthcare Letter
August 18, 2020
Fiat Lux

Featured Trade:

(MORE DARK HORSES IN THE COVID-19 VACCINE RACE)
(CVAC), (MRNA), (BNTX), (PFE), (GSK), (AZN), (JNJ), (NVAX)

July 28, 2020

Biotech Letter

Mad Hedge Biotech & Healthcare Letter
July 28, 2020
Fiat Lux

Featured Trade:

(EARLY WINNERS ARE TURNING UP IN THE COVID-19 VACCINE RACE)
(MRNA), (AZN), (PFE), (JNJ), (MRK), (BNTX)

Early Winners are Turning Up in the Covid-19 Vaccine Race

Biotech Letter

In less than six months since the pandemic broke, the world has come up with 140 vaccine candidates in pre-clinical trial phase and 23 undergoing the clinical evaluation stage.

However, the race to produce a COVID-19 vaccine recently intensified after three of the leading laboratories shared promising progress from their early human trials.

Among the frontrunners, AstraZeneca (AZN), Pfizer (PFE), and Moderna (MRNA) are dubbed as the “most ambitious” primarily due to their tight timelines for approval and their seemingly unreachable goals in terms of the total doses they could produce this year.

All the vaccine developers that released their results claimed that their candidates triggered strong immune responses with patients experiencing only minor side effects.

According to their data, their vaccines elicited similar responses as those observed from the individuals who recovered from COVID-19.

Moderna, which was the first developer to test its mRNA-1273 vaccine in humans, announced that Phase 3 of its human trials would start on July 27. This will involve 30,000 volunteers.

Moderna’s vaccine makes use of a genetic material, called mRNA, from the SARS-CoV-2 to trigger the body’s immune system to fight off the virus.

Meanwhile, AstraZeneca’s partnership with Oxford University produced what could be the most closely followed COVID-19 vaccine thus far. The candidate is tentatively known as AZD1222.

Even before the vaccine’s efficacy gets proven, the company already received a total order of 2 billion doses worldwide. Early estimates indicate that AstraZeneca can produce a million doses of its COVID-19 vaccine by September.

This partnership’s project is so sought after that rumors keep persisting that Russian spies are out to steal the research.

AstraZeneca’s approach is similar to the technique used by another vaccine maker outside the US, China’s own Cansino Biologics.

Both developers altered the genes of the adenovirus, which is another common virus, modifying it to harmlessly mimic the SARS-CoV-2. This will then induce an immune response from the body.

While Moderna was the first to enter human trials, AstraZeneca and Oxford’s candidate was the first to start the Phase 3 tests.

The reason that AZD1222 is gaining more traction than Moderna’s vaccine is because one dose of AstraZeneca’s candidate elicited an antibody response in more than 90% of the participants and a second dose managed to hit 100% -- the same level found among convalescent COVID-19 patients.

Among the three, though, Pfizer and BioNTech (BNTX) stand out because this is the only collaboration that refused government funding from the US.

This partnership uses the same approach as Moderna, with its early results also showing off promising immune responses from the participants.

Although the details have yet to be officially released, Pfizer landed its first government contract. The deal is with the UK and the New York-based biopharmaceutical company is expected to deliver 30 million vaccine doses between 2020 and 2021.

Aside from Moderna, AstraZeneca, and Pfizer, two more companies were included in Donald Trump’s Operation Warp Speed.

The fourth company is Johnson & Johnson (JNJ). The biotechnology and healthcare titan has yet to release results, with its first human trials scheduled this July and late-stage tests expected to start as soon as September. JNJ’s goal is to produce a vaccine by early 2021.

The fifth contender in the COVID-19 vaccine race is Merck (MRK).

While the rest of the developers are focusing on speed, Merck insists on taking its time before releasing their results. The company has made no announcement on its plans for human studies, with its leaders warning against accelerating the safety protocols.

At this point, there’s still no accurate way to determine the price of the COVID-19 vaccine. Nonetheless, investors are already smelling big money for this program.

A glaring example of how the COVID-19 crisis has pumped funds into biotechnology and healthcare companies is Moderna’s trajectory this year.

Prior to this pandemic, Moderna had a market capitalization of roughly $7 billion. Since February, though, this number has more than tripled its value at $23 billion.

While it is not the case for all the companies in the vaccine race, the excitement over it is understandable.

Let’s indulge in a bit of a back-of-the-envelope calculation.

If we base the estimates on the recent vaccines for diseases like meningitis B and the shingles, which cost somewhere between $300 and $400 for an entire course, then we can assume that the COVID-19 vaccine could fall near $500 per course.

That means vaccinating the entire population would rake in more than $150 billion to the company --- virtually all of its profit.

Inasmuch as that presents a lucrative opportunity, most of the leading companies already announced that they do not intend to make a profit off their COVID-19 programs.

These include Moderna, JNJ, and AstraZeneca. Meanwhile, Pfizer has yet to make that announcement.