After plunging dramatically at the beginning of the month, biopharmaceutical equities appear to be recovering some of the valuation they originally lost when the financial markets cratered. As the curtain closed on a very turbulent month that most investors will want to forget, the BioWorld Biopharmaceutical index finished up 0.75%, but down about 2% for the year. The Dow Jones Industrial Average did rally at the end of the month but still dropped almost 14%, contributing to a 23% loss in value for the year. (See BioWorld Biopharmaceutical index, below.)

The Biopharmaceutical index has been buoyed by those companies actively developing therapies against COVID-19. Regeneron Pharmaceuticals Inc., for example, saw its shares (NASDAQ:REGN) jump 10% in March (30% year-to-date). On March 30, along with partner Sanofi SA, the company announced the first patient outside of the U.S. had been treated as part of a global clinical program evaluating Kevzara (sarilumab) in patients hospitalized with severe COVID-19. The global clinical program has now been initiated in Italy, Spain, Germany, France, Canada, Russia and the U.S. Kevzara is a fully human monoclonal antibody that inhibits the interleukin-6 (IL-6) pathway by binding and blocking the IL-6 receptor. IL-6 may play a role in driving the overactive inflammatory response in the lungs of patients who are severely or critically ill with COVID-19 infection.

The study represents the second multicenter phase II/III trial as part of the Kevzara COVID-19 program, and the companies are continuing to work with health authorities around the world to secure initiation at additional sites.

This U.S.-based trial is taking place at medical centers in New York, one of the epicenters of the U.S. COVID-19 outbreak, and will assess the safety and efficacy of adding Kevzara to usual supportive care, compared to supportive care plus placebo. The drug is approved in multiple countries to treat adults with moderately to severely active rheumatoid arthritis who have not responded to or tolerated previous therapy.

Sanofi’s shares (NASDAQ:SNY) haven’t enjoyed the same valuation increase as Regeneron’s, closing the month down 5.5% (down 13% YTD).

New York-based Pfizer Inc. is another big pharma whose shares have dipped despite its involvement in developing therapies against COVID-19. This month, the company issued a five-point plan calling on the biopharma industry to join it in committing to unprecedented collaboration to combat COVID-19.

It also announced it had signed a letter of intent with Biontech SE for the co-development and distribution (excluding China) of a potential mRNA-based coronavirus vaccine aimed at preventing COVID-19 infection.

The collaboration aims to accelerate development of Biontech’s potentially first-in-class COVID-19 mRNA vaccine program, BNT-162, which is expected to enter clinical testing by the end of April. The rapid advancement of this collaboration is attributed to the research and development collaboration the companies entered in 2018 to develop mRNA-based vaccines for prevention of influenza.

Pfizer’s shares closed the month down 2%.

Valuation

The valuation of Gilead Sciences Inc.’s shares (NASDAQ:GILD) did briefly push the company’s market cap past the $100 billion mark earlier this month, but they have since eased back to close the period up 7.8% (up 15% YTD). The company did receive a public backlash to the news that the FDA had granted it an orphan drug designation for remdesivir, an antiviral in development to treat COVID-19. In response, the Foster City, Calif., company took the unprecedented step of rescinding its request for the designation and will waive all benefits that come with it, including tax credits, seven years of market exclusivity and a waiver of the requirement to provide a pediatric study plan prior to submitting a new drug application.

In the wake of the decision, Gilead said it’s “confident that it can maintain an expedited timeline in seeking regulatory review of remdesivir without the orphan drug designation.” Its recent engagement with regulators has demonstrated that submissions and review relating to remdesivir as a COVID-19 treatment are being expedited.

Cambridge, Mass.-based Biogen Inc. and Vir Biotechnology Inc., of San Francisco, are collaborating to develop and manufacture human monoclonal antibodies to treat COVID-19 patients. Subject to a final agreement, Biogen will continue cell line development, process development and clinical manufacturing to advance development of Vir’s antibodies. In an effort to reduce development time, Vir’s lead development candidate has been transferred to Biogen, and Vir anticipates that human trials can start within three to five months. The ability of that antibody to neutralize the SARS-CoV-2 live virus has been confirmed in two separate laboratories. The antibody binds to an epitope on SARS-CoV-2 that is shared with SARS-CoV-1 (also known as SARS), indicating that the epitope is highly conserved. Vir said it believes that the conservation of that epitope will make it more difficult for escape mutants to develop. Biogen’s shares (NASDAQ:BIIB) closed the month up 2.6% and are up 6.6% for the year.

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