Another volatile day of trading in health care stocks unfolded March 13, after a trebling of broader market carnage the day before and the declaration of a national emergency by U.S. President Donald Trump Friday afternoon. Substantial declines hit shares of Moderna Inc., Vaxart Inc. and Inovio Pharmaceuticals Inc., all of which had recently rallied on optimism over coronavirus-fighting efforts. Biopharma shares saw some recovery, with both the S&P 500 Health Care Sector and Nasdaq biotechnology indices each rising a bit more than 2% each before Friday's close. However, both indices have fallen more than 15% year to date.

"Overall, we see the health care sector as relatively better-positioned compared to the broader market in the midst of this pandemic," J.P. Morgan's U.S. health care team said in a Friday morning presentation in which they suggested demand for care and drugs would remain "fairly inelastic overall."

Still, in a wave of 10-K filings and reports this week, drugmakers and analysts expressed mounting concerns over manufacturing, regulatory and logistical risks. The message, represented in black and white, is plain: No one knows quite what to expect as the crisis deepens.

"While we note that the immediate effects have been limited (e.g. [conferences] cancelled), we expect the breadth and depth of this impact to increase with the number of infections and degree of social control," Jefferies analyst Chris Howerton told clients on Friday. Though the immediate impacts appear to be minimal, he said, Jefferies has begun tracking a multitude of events that could be at risk for disruption, including advisory committee meetings, medical conferences, data readouts, trial initiations and commercial launches.

In corporate SEC filings, public health crises, pandemics and epidemics all got a place in the wall of worries outlined in the dreaded "Risk Factors" section of many fresh 10-Ks. Future developments are "highly uncertain and cannot be predicted," Axsome Therapeutics Inc. and others warned in their latest annual filings. But beyond the usual concerns affecting so many companies during the pandemic, such as travel and personnel constraints, biopharma companies are also dealing with additional issues.

Manufacturing risk, a high-stakes arena with the potential to delay trials, derail anticipated approvals, and even cut off product supply altogether, emerged as a top concern. Cambridge, Mass.-based X4 Pharmaceuticals Inc., for instance, noted that it relies on a single third-party manufacturer for the active pharmaceutical ingredient for its candidate, mavorixafor, and a single third-party manufacturer to provide fill and finish services for the final drug product formulation. "Our ability to obtain clinical supplies of product candidates could be disrupted if the operations of these suppliers are affected by a man-made or natural disaster or other business interruption."

Impacts on regulators, with their ultimate say over how quickly products get to market, also raised flags. The potential for delays of reviews, approvals and communications with regulatory authorities were all flagged in filings from companies such as Seelos Therapeutics Inc. and Nextcure Inc., both of which are shepherding candidates through early stage development and could, like other young companies, face challenges without access to informal exchanges with the FDA or other regulators.

Companies are also fretting in the filings about impacts on their collaboration partners, clinical study sites, contract manufacturers and vendors – elements that often today comprise a significant share of the labor at work on development-stage candidates, especially for lean young companies. The FDA's suspension of most foreign inspections through April 2020 also remains of concern to some companies, since it might cause delays or other issues.

"At this time, we are not aware of any material impacts to ongoing/planned clinical trials or commercial launches," Jefferies said. But, while contingency plans will likely mitigate disruption to ongoing clinical trials, particularly those for life-threatening indications, "we see the potential for new trials/launches to suffer disruptions," the analysts said.

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