How Pharma Companies Have Fared in the Pandemic

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Michal Marszal, CFA

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Michal Marszal, I’m the portfolio manager at CIBC Asset Management, focusing on the global healthcare sector.

During the course of the COVID-19 pandemic we have seen a number of developments on the vaccination side which, of course, has had the most profound impact on the course of the pandemic. Here, I think the majority of the development has been focused on the mRNA based platforms for vaccinations. Those are the modalities that today dominate the commercial landscape with respect to COVID-19 vaccines. The mRNA technologies, unlike the viral vectors, which have been developed by certain pharmaceutical companies, have been mostly dominated by Pfizer, which has developed their vaccine in collaboration with a company called BioNTech, and a biotechnology company called Moderna. These two mRNA vaccines account for the vast majority of vaccinations in the Western world. Therefore, those vaccines have tremendously benefited the companies that have developed them.

The other notable player in the mRNA space, which sort of highlights to some extent the differentiation of the technologies and inability of simplifying all of the development programs into one basket based on the modalities which are being utilized, was a setback of a company called CureVac. Which used what we refer to as an unmodified mRNA vaccine. Hence, the entire playing field was left dominated by the upper mentioned two major players.

There were also other vaccine developments that looked initially very promising using more traditional, so-called subunit approaches. The most notable one here was a company called Novavax. However, despite a very positive clinical development program, that specific asset has faced a number of setbacks with respect to manufacturing, and therefore has so far not played any role whatsoever in global vaccinations. The outlook for that vaccine today remains somewhat uncertain in light of the emerging variants for which the mRNA technology may be more rapidly adaptable, and the fact that the existing vaccines already have long term contracts in place for tenders across the majority of the addressable markets.

The only other program of interest in the space of more traditional approaches, the subunit approaches, has been a development program by Sanofi, in collaboration with GlaxoSmithKline. However, that program has been relatively slowly advancing through clinical development, and really today only focuses on potential alternative booster types of solutions as an alternative to the mRNA boosters. Hence, the majority of the benefit here is really dominated by Pfizer and Moderna, and that’s respected with respect to the vaccination.

I would also mention that there has been really interesting developments also on the therapeutic side of the COVID-19 story. Here, interestingly enough, Pfizer yet again has come out on top with their protease inhibitor, which is an oral pill that can be used for treating COVID-19 infections once diagnosed, with a notable, significantly more modest clinical efficacy demonstrated by an elite asset from a company called Merck. A complete failure so far of one of the interesting assets in development by a biotechnology company called Aprea, which had a collaboration in this space with Roche. Nevertheless, that has now been terminated due to the failure of their later stage clinical trial. Other development assets in the space of therapeutics are mostly focusing on much earlier stage assets and therefore, for the foreseeable future Pfizer will be most likely dominating this space with significantly smaller modest contribution from Merck.