(MRNA) Archives - Page 11 of 27 - Mad Hedge Fund Trader

Beyond the Covid-19 Vaccine

Even altruism has its limits.

Adding to the list of things we didn’t expect to happen in 2021, AstraZeneca (AZN) has followed the footsteps of Pfizer (PFE) and BioNTech (BNTX) and decided to begin making money off its COVID-19 vaccine.

The news is an about-face from the Cambridge-based company’s previous pledge to not profit from this while the pandemic is still ongoing.

Given AstraZeneca’s decision, there’s a possibility that it no longer believes that COVID-19 remains a threat of global proportions—or it at least thinks the issue has become more manageable.

It remains to be seen how the company will react to the emergence of the Omicron variant, and if it plans to push through with this decision.

While AstraZeneca’s agreements with different countries won’t allow it to come right out of the gate and just start slapping massive profits all over the place, the company plans to begin “progressively transitioning” to profitability following its third-quarter call.

Moreover, the company assured that its COVID-19 vaccine would remain reasonably priced for low- to middle-income countries. This means that it plans to jack up the price in wealthier nations instead.

However, AstraZeneca isn’t doing this for purely financial reasons.

According to the company, profits from the vaccine will be allocated to another COVID-19-related effort, its antibody therapy called AZD7442—a treatment that’s expected to compete with therapies from Regeneron (REGN) and Gilead Sciences (GILD).

Regardless of how they spin this recent turn of events, the key takeaway is that they’ll start making money off the vaccine.

Although changing their tune about the COVID-19 vaccine might get them some flak, it’s crucial to bear in mind that AstraZeneca is a for-profit company. This is the natural course for them to take vis-a-vis their products.

Besides its work on COVID-19, AstraZeneca has been pouring money on R&D over the past 12 months to fund different clinical trials for its oncology, cardiovascular, and immunology segments. To date, the company’s spending on research and development has climbed by 27.5% year-over-year to reach $3.54 billion in the first 6 months of 2021.

This move to invest heavily in developing new drugs for severe medical conditions is anticipated to secure a solid future revenue and continuous growth in earnings per share for the company.

Given its pipeline and history, AstraZeneca is actually projected to grow by over 20% annually over the course of the next five years.

One result of this effort is the expansion of the company’s top-selling cancer drug, Imfinzi.

At the moment, Imfinzi is approved as a lung cancer treatment. However, it can soon boost its sales to include biliary tract cancer in its indications.

There are roughly 50,000 individuals diagnosed with biliary tract cancer annually in the United States, Japan, and Europe, with the number hitting 210,000 across the globe.

In terms of profitability, we can look at Incyte’s (INCY) Pemazyre, which was approved in 2020. Sales of the drug grew four-fold in the first 9 months to reach $48 million.

Admittedly, Imfinzi’s market share will rely on its efficacy and safety results.

However, the treatment has a track record of delivering a superior standard of care and guaranteeing that it has the same safety profile as chemotherapy.

Hence, it’s reasonable to say that we can conservatively expect Imfinzi to capture at least 15% of the whole biliary tract cancer market. This would be roughly 30,000 patients worldwide.

Currently, Imfinzi’s price tag is at $180,000 in the US, but the drug might be cheaper in other countries.

Based on the market potential of its biliary tract cancer indication, this additional indication could rake in an additional $600 million annually for AstraZeneca once it gains regulatory approval.

Although this is merely less than 2% of the projected $36.1 billion total revenue for AstraZeneca in 2021, adding $600 million would still be a notable tailwind to the $2.5 billion estimated earnings from Imfinzi.

While its COVID-19 vaccine did not deliver the same outstanding efficacy results as the mRNA vaccines of Moderna (MRNA) and Pfizer / BioNTech, it’s still one of the handfuls of major pharmaceutical companies that managed to develop and distribute an effective product.

Overall, vaccine decisions aside, AstraZeneca appears to be in a great place with a robust oncology portfolio. Therefore, this stock looks like a solid buy with several upcoming price catalysts in 2021 and 2022.

November 16, 2021

Biotech Letter

Mad Hedge Biotech and Healthcare Letter
November 16, 2021
Fiat Lux

Featured Trade:

(FORGOTTEN COVID-19 STOCK STILL ALIVE AND KICKING)
(GILD), (REGN), (MRNA), (AZN), (JNJ), (PFE), (BNTX), (MRK)

Forgotten Covid-19 Stock Still Alive and Kicking

Biotech Letter

At times, it can be rewarding to go against the tide. This can also be applicable to the stock market.

Forgotten names or companies with shares that got hammered can eventually transform into remarkable investment opportunities. After all, it's always wise to invest in a quality stock when it loses some serious altitude.

Now, let's take a look at a biotechnology and healthcare business that has been performing poorly in the past 12 months but still holds a promising chance of bouncing back: Gilead Sciences (GILD).

This biotechnology giant is still reeling after its recent regulatory setback involving Filgotinib, a potential treatment for rheumatoid arthritis.

Initially, Filgotinib was slated as Gilead Sciences' next blockbuster drug. Unfortunately, the US FDA didn't agree with those plans.

The regulatory body rejected the treatment, pointing out the risks of patients developing male fertility problems as one of the significant reasons.

By November 2020, Gilead Sciences completely abandoned the Filgotinib project, at least in the United States.

Prior to this, Gilead Sciences took center stage when its Remdesivir, sold under the brand name Veklury, was identified as an effective COVID-19 treatment.

While this product has taken the back seat since other treatments from the likes of Regeneron (REGN) and especially vaccines from Moderna (MRNA), Johnson & Johnson (JNJ), AstraZeneca (AZN), Pfizer (PFE), and BioNTech (BNTX) have emerged, it still generated impressive numbers.

In the second quarter alone, Veklury brought in $829 million in revenue.

Gilead Sciences anticipate sales to reach somewhere between $2.7 billion and $3.1 billion for this drug in 2021.

Arguably, though, the biggest draw in buying Gilead Sciences stock is its HIV pipeline.

To date, the company holds roughly 75% of the market share in the US and approximately 50% in Europe.

What's even more promising is that the company's top-selling HIV product, Biktarvy, still has vast room to grow.

This is impressive considering that Biktarvy raked in approximately $2 billion in sales in the second quarter of 2021, showing off a 24.3% year-over-year jump.

Looking at its trajectory and considering that the drug generated $7.3 billion in 2020, Biktarvy sales are estimated to hit $11.7 billion in 2026.

More than the company's incredible dominance in cornering the HIV market, Gilead Sciences also has an excellent pipeline with over three dozen clinical programs queued.

Inevitably, one of its major concentrations is expanding its HIV portfolio.

In fact, it has recently teamed up with fellow biotechnology giant Merck (MRK) to collaborate on a potential HIV treatment—a candidate that's anticipated to equal if not surpass Biktarvy's fame.

One more potential blockbuster in the HIV market is Lenacapavir, which is an injection regiment that Gilead Sciences recently submitted for approval to the FDA.

If granted the green light, this will be administered once every 6 months, making it the first-ever long-acting regimen for HIV patients.

Meanwhile, the company is also growing its Hepatitis B franchise to avoid being too dependent on a single market.

So far, Gilead Sciences estimates about $1 billion in sales for this lineup in 2022, making the Hepatitis B portfolio a reliable part of the business.

Another growing section of the business is its cell therapy segment, with Yescarta and Tecartus nearing their peak performances at $1 billion in sales yearly.

Even its newly developed cancer cell therapy Magrolimab looks promising, with the potential to rake in another $1 billion in peak sales as well.

Needless to say, Gilead Sciences' new products and expansions have been displaying realistic potential to drive billions in added yearly revenue.

Overall, Gilead Sciences is a stable and profitable biotechnology and healthcare business.

It's a large-cap biopharmaceutical organization and market leader that has been solidly performing well for over 3 decades, with an influential presence in more than 35 countries.

Despite its recent challenges, Gilead Sciences remains an excellent buy, especially on the dip.

November 9, 2021

Biotech Letter

Mad Hedge Biotech and Healthcare Letter
November 9, 2021
Fiat Lux

Featured Trade:

(A SAFE BET FOR MRNA TECHNOLOGY ENTHUSIASTS)
(BNTX), (PFE), (MRNA), (REGN), (SNY), (NVAX)

A Safe Bet for MRNA Technology Enthusiasts

Biotech Letter

It was a case of being in the right place at the right time.

BioNTech (BNTX) has always been focused on mRNA technology, so when Big Pharma player Pfizer (PFE) knocked on its doors for a collaboration, this up-and-coming biotech company was more than ready to go.

We all know what happened after that. BioNTech and Pfizer became the first to bring a COVID-19 vaccine to the public.

And just like how the pandemic changed the fortune of Moderna (MRNA), the COVID-19 situation also served as proof of concept of BioNTech’s technology.

Looking at BioNTech’s history and recent performance, I can see several reasons to buy the stock.

Short term, one of the primary reasons to buy BioNTech is obvious: its overwhelming success in creating a COVID-19 vaccine.

BioNTech expects approximately $18.4 billion in revenue from its COVID-19 vaccine in 2021.

In its second-quarter earnings report, BioNTech and Pfizer disclosed that they already crossed the 1 billion mark in terms of the vaccine doses delivered globally.

In fact, BioNTech’s revenues beat the projected $2.35 billion, with the company generating $6.4 billion in sales for the second quarter of 2021 alone.

This is an impressive jump from the $47.54 million it recorded during the same period in 2020.

Considering the consistently high demand for the BioNTech-Pfizer vaccine, it’s reasonable to expect that the momentum will be sustained.

To date, an additional 200 million doses have been ordered by the US government. This is on top of the 500 million doses it initially bought under the current supply agreement.

Meanwhile, the EU’s orders for 2021 reached 660 million doses plus 900 million more for 2022 to 2023.

Depending on the situation, another 900 million doses might be added to these initial agreements.

Just between the US and the EU, BioNTech has already received orders for over 1 billion doses of COVID-19 vaccines for 2022 onward—a number that’s widely expected to go up when other nations place their orders as well.

So far, the two companies have sealed an agreement with a South African biopharmaceutical company, Biovac, to collaborate on the manufacture and distribution of the vaccine across the 55 member states of the African Union.

As for the South American area, the partners have recently signed a deal with a Brazilian biopharma company, Eurofarma Laboratorios, to cover the Latin American regions.

Moving with the long-term reasons to invest in BioNTech, one of the most convincing aspects is the company’s promising pipeline.

BioNTech is realistic enough that the demand for its COVID-19 vaccine will eventually plateau. That has been the expectation since the beginning, which is why the company has been leveraging the incredible cash flow through expanding its pipeline.

Actually, BioNTech is allocating roughly $1.05 billion for R&D expenses in 2021.

Some of the segments that BioNTech has been working on are regenerative treatments and products for infectious diseases, inflammatory conditions, and allergies.

The company is also developing potential cancer therapies. After all, curing cancer is considered the Holy Grail of mRNA-centered companies—an achievement that would undoubtedly catapult BioNTech’s stock to the top of the Big Pharma list.

One of the telltale indicators of BioNTech’s plan to focus on oncology treatments is its July 2021 acquisition of Kite’s R&D platform on TCR Cell solid tumor neoantigen T-cell receptor (TCR) along with its manufacturing plant in Maryland.

The driving force behind that deal is BioNTech’s desire to become a first-mover in the cell therapy space.

Basically, the company added ammunition to its pipeline to come up with individualized cancer therapies.

BioNTech also has a couple of mRNA-based solutions queued for Phase 2 trials this year.

One is FixVac BNT111, which is developed for melanoma and a collaborative effort with Regeneron (REGN). This candidate has shown promising results, with the possibility of being available for use to over 90% of melanoma patients.

Others include FixVac BNT113, which targets head and neck cancer, and FixVac BNT112 for prostate cancer.

Another promising candidate is its cancer vaccine, INeST BNT122, which BioNTech is working on with Genentech.

Apart from these, BioNTech is also looking at developing treatments for infectious diseases as another potential long-term growth pillar—a direction taken by its biggest competitor in mRNA-based solutions, Moderna.

Checking its pipeline, it looks like BioNTech plans to target malaria as its first project. It also has candidates for HIV, tuberculosis, and influenza.

BioNTech’s goal is to launch the first-ever mRNA vaccine against malaria. If all goes according to plan, the company plans to conduct clinical trials by 2022.

Meanwhile, its influenza vaccine program, which faces serious competition against Sanofi (SNY) and Novavax (NVAX), will be another collaborative work with Pfizer. The two companies plan to initiate human trials before the end of 2021.

Pretty much like Moderna, I look at BioNTech as a long-term play. Investing in this company requires patience and belief in the burgeoning mRNA space.

Overall, I think BioNTech is a safe bet for investors looking to dip their toes in the rapidly expanding mRNA world.

November 4, 2021

Biotech Letter

Mad Hedge Biotech and Healthcare Letter
November 4, 2021
Fiat Lux

Featured Trade:

(A LONG-TERM STOCK FOR MONOPOLY AFICIONADOS)
(VRTX), (ABBV), (GLPG), (CRSP), (MRNA)

A Long-Term Stock for Monopoly Aficionados

Biotech Letter

Investors have a myriad of biotechnology stocks to choose from. However, most of these options are still in the developmental stage for their first blockbuster product that can hit at least $1 billion in sales annually.

Then, there are biotechnology companies like Vertex Pharmaceuticals (VRTX).

Vertex has a storied history of launching blockbuster names in the market for rare and hard-to-treat diseases.

Among the products in its portfolio, what stands out is Vertex’s work on cystic fibrosis (CF) treatments.

CF is an incurable genetic condition that can damage the lungs and the pancreas. So far, Vertex has four CF treatments available and holds 97% of the market share worldwide, valued at roughly $6.36 billion in 2020.

The company’s latest CF treatment, Trikafta, is already projected to generate roughly $5 billion in sales after only less than 2 years since its release.

Thus far, Vertex has reported an annualized sales run rate of $7.2 billion in its second-quarter earnings report for 2021. This number is expected to climb higher as the company increases its penetration rate in the CF market in the coming years.

Given its history and trajectory, Vertex is projected to generate $10 billion to $10.5 billion in sales for its CF franchise by 2024.

Considering the lucrative CF market’s potential, it no longer comes as a surprise that more and more competitors are entering the space. However, none can even be considered as a close second to Vertex.

AbbVie (ABBV) partnered with Galapagos (GLPG) to come up with a combination CF treatment a few years back, only to get stalled in Phase 2 trials.

It remains to be seen if AbbVie, which eventually acquired the entire CF line from Galapagos, will be able to develop a drug worthy of challenging Vertex’s dominance in the arena.

The driving force behind Vertex’s success is its operating model, which works overtime to exhaust all resources to protect its CF revenue.

Throughout the years, the company has been consistent in its efforts to keep developing innovative CF treatments and expanding its coverage to include more mutations.

In turn, these new drugs all but guarantee that Vertex enjoys a stable and secure cash flow for years.

For example, the IP protection for Trikafta will reach up to the late 2030s. If innovations on the drug are discovered, then this can very well extend into the 2040s.

Despite the overwhelming success of its CF franchise, Vertex knows not to rest all its eggs in one basket.

The company has been working on expanding its expertise. A telltale sign of this decision is its burgeoning partnership with CRISPR Therapeutics (CRSP).

So far, the two have created a promising gene-editing treatment, CTX001, which targets rare blood diseases and sickle cell disease.

Looking at their timeline, the therapy could be ready for regulatory review by 2023.

Other than CTX001, Vertex and CRISPR have been developing several mRNA-based treatments currently under Phase 2 trials.

Among them, the therapies generating the most excitement are the ones targeting pain and rare kidney diseases.

For acute pain treatments alone, the US market is already worth $4 billion. To this day, the non-opioid medication market remains an extremely attractive space.

Needless to say, a product offering an approved safety profile and high efficacy could easily grab the multi-billion sales potential.

Meanwhile, riding on the momentum of its mRNA programs, Vertex also partnered with Moderna (MRNA) to develop more therapies for rare and hard-to-treat diseases.

While its collaboration with Moderna has yet to reveal its prime candidates, there’s a strong possibility that one of them would be a gene therapy for CF.

CTX001’s addressable market is highly lucrative and still exclusive to hyper-specialized companies.

This top-priced orphan gene-editing treatment could rake in annual sales within the range of $3 billion and $4.5 billion. This estimate covers roughly 3,000 to 4,500 patients every year, with average individual spending of $1 million.

Although this price might sound too steep, keep in mind that CTX001 treats lifelong incurable diseases. Typically, patients spend an average of $200, 000 annually.

If successful, this treatment from Vertex and CRISPR could provide a one-and-done answer to the suffering of these patients, justifying the steep price tag.

Overall, I see Vertex as a stock selling a pretty reasonable price.

Considering its relatively young pipeline, though, this should be seen as a long-term investment—one that has been tested and proven to be successful at targeting multi-billion-dollar markets.

November 2, 2021

Biotech Letter

Mad Hedge Biotech and Healthcare Letter
November 2, 2021
Fiat Lux

Featured Trade:

(IS THIS THE BEST BUY AMONG THE VACCINE STOCKS)
(NVAX), (MRNA), (PFE), (BNTX), (SNY), (JNJ)

Is This the Best Buy Among the Vaccine Stocks?

Biotech Letter

Many investors have amassed a fortune since the pandemic started in the early months of 2020 by betting on COVID-19 vaccine candidates. Moderna (MRNA), for example, has skyrocketed to over 1,500% since last year.

However, there was an even bigger winner: Novavax (NVAX).

Novavax shares actually rose by a jaw-dropping 4,000% since the COVID-19 pandemic began, with the company’s wild rollercoaster ride still not reaching its end anytime soon.

In fact, Novavax has been quite volatile in 2021, rising by more than 180% in early February only to have most of those gains practically wiped out a mere three months after.

Then, the stock managed to show off a strong rebound over the following months. Since early September, though, Novavax’s share price has fallen by over 35%.

While these can be discouraging for some investors, I think that the befuddling gyrations that had us reeling in the past months tell a different story: We might have just discovered the biggest bargain among the leading COVID-19 vaccine stocks in the market today.

There are two possible reasons for the Novavax selloff recently.

The first is the company’s delayed filing of its own COVID-19 vaccine candidate, NVX-CoV2373. This is particularly frustrating considering that Novavax has failed to meet its deadlines multiple times now.

Nonetheless, I prefer to look at these delays as mere speed bumps than actual roadblocks that hinder the company from achieving its goal.

After all, the issue is not on the vaccine’s safety and efficacy—the results have been proven to be highly compelling—but on manufacturing concerns, which can eventually be resolved.

The second reason is the recent update from Merck (MRK) and its partner, Ridgeback Biotherapeutics, on their COVID-19 pill. Of the two, I find this reason to be an overreaction by the market.

None of the vaccine developers should ever be negatively affected by Merck’s oral treatment. While some people might choose not to get the vaccine if and when the pills become available, practically all governments worldwide are still committed to vaccinating their citizens.

Moreover, the COVID-19 vaccines will probably be necessary every year.

When Novavax gets the required authorizations, the company is set to generate a boatload of cash. The biotechnology company is anticipating to supply up to 200 million doses in the European Union alone.

The entire COVID-10 vaccine market is projected to be worth $115 billion by the end of 2021. Moderna is estimated to deliver up to 3 billion doses, while Novavax is expected to produce up to 2 billion doses by 2022.

The rest of the anticipated 14 billion doses will be divided among the other vaccine makers.

Among them, though, Novavax is expected to be the stand-out.

For one, its vaccine candidate appears to be the most robust and affordable at $16 per dose compared to Moderna’s $25.50 and Pfizer-BioNTech’s $22.80.

The growing number of reports on the side effects of mRNA vaccines, which are said to be of a higher rate than Johnson & Johnson’s (JNJ) candidate, can also be a turnoff for many people.

Since Novavax uses a more traditional and familiar vaccine technology—the same one used for the flu, HPV, and Hepatitis B—it causes lower side effects rates.

More importantly, these are mild symptoms like muscle pain and fatigue compared to the heart inflammation concerns raised among those jabbed with Moderna or Pfizer vaccines.

While the side effects from the other two occur in relatively small populations, Novavax is anticipated to be perceived as the more reassuring option, especially for people who are still uneasy with the new technology of mRNA vaccines.

More importantly, Novavax can offer a solution to the global problem of vaccine hesitancy for COVID-19.

To offer a context on how important this is, 48% of Russians and 27% of Americans refuse to take the vaccines.

As of September, only 181.2 million individuals in the US, or 55.1% of the country’s population, have agreed to be fully vaccinated. Needless to say, overcoming this hesitancy would be a massive relief for everyone.

Apart from its COVID-19 vaccine, Novavax has also been working on an influenza vaccine candidate, NanoFlu.

Recently, results from the NanoFlu clinical trials showed that it’s way more effective than the leading brand today, Sanofi’s (SNY) Fluzone Quadrivalent.

If NanoFlu gains approval, this will be another huge growth driver for Novavax.

To put it in perspective, Sanofi’s Fluzone generated $2.9 billion in sales in 2020—a market that Novavax can also tap into and might even dominate.

Meanwhile, the flu vaccine market in the US alone continues to expand.

From 2020 to 2021, the number of flu vaccines administered rose by 11% year over year to reach 193.8 million doses. That’s roughly 59% of the US population—a country that’s only 7th place in terms of the global rates of flu vaccination.

That signifies a colossal market opportunity worldwide for Novavax to capitalize.

At this point, Novavax has yet to secure any approval or official authorization for NVX-CoV2373 or NanoFlu—and that’s the best reason to add this stock to your portfolio.

Investors are given a chance to seize shares of the stock while it’s still in the stage where its most lucrative catalysts are just lurking around the corner.

October 21, 2021

Biotech Letter

Mad Hedge Biotech and Healthcare Letter
October 21, 2021
Fiat Lux

Featured Trade:

(A DIVIDEND ARISTOCRAT THAT DELIVERS LIKE CLOCKWORK)
(JNJ), (PFE), (MRNA), (BNTX), (NVS), (RHHBY), (MGTX)

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