Investors are beginning to show confidence in the financial markets, once again believing that the worst of the ravages caused by the COVID-19 pandemic are behind us and that the stringent restrictions on business activity and personal behavior currently in place will be slowly lifted. As a result, stocks in all sectors rallied in April from their March meltdowns.
Against that positive backdrop, the BioWorld Biopharmaceutical index gained more than 10% during April to climb into positive territory for the first time this year. With biopharmaceutical companies working feverishly on unlocking cures for the deadly COVID-19 infection, promising results from their research was handsomely rewarded by investors. (See BioWorld Biopharmaceutical index, below.)
“With society looking to the biopharma industry for COVID therapies and vaccines, the industry's perception has improved significantly, increasing generalist interest,” noted Cowen & Co. analysts writing in their monthly Biotech Thermometer report.
However, they caution that many biotech specialists “are skeptical of the market rally as they worry a ‘second wave’ of COVID would be a disappointment.”
Among the companies heavily involved in developing COVID-19 and driving the valuation of the BioWorld Biopharmaceutical index, Sarepta Therapeutics Inc., of Cambridge, Mass., inked a Cooperative Research and Development Agreement with the U.S. Army Medical Research Institute of Infectious Diseases (USAMRIID) involving use of its phosphorodiamidate morpholino oligomer (PMO) platform in a collaboration to identify antisense oligonucleotides with activity against SARS-CoV-2 for the potential treatment of COVID-19. The agreement calls for Sarepta to design, synthesize, manufacture and provide to USAMRIID multiple peptide-conjugated PMO constructs based on genetic sequencing of SARS-CoV-2 for COVID-19. USAMRIID will evaluate the constructs on characterized wild-type SARS-CoV-2 viruses for their potential to inhibit viral infection. Based on results, Sarepta and USAMRIID will consider collaborative funding proposals to advance development of treatments for COVID-19. The company’s shares (NASDAQ:SRPT) were up 20.5% for the month.
Foster City, Calif.-based Gilead Sciences Inc., which is ramping up its antiviral remdesivir COVID-19 candidate production and research and is donating 1.5 million doses for compassionate use, has seen its shares push 12% higher this month. The drug received glowing praise from Anthony Fauci, director of the NIH’s National Institute for Allergy and Infectious Diseases (NIAID), last week following revelations that a randomized, placebo-controlled study of the company’s antiviral, reduced time to recovery for hospitalized patients with "advanced" COVID-19, along with additional data from an open-label phase III trial.
Describing an adaptive trial sponsored by the NIAID that met its primary endpoint of time to recovery, Fauci said that "remdesivir has a clear-cut significant positive effect in diminishing the time to recovery," calling the outcome "quite important." In addition, "the mortality rate trended towards being better, in the sense of less deaths in the remdesivir group: 8% vs. 11% in the placebo group." He added that "all of the other trials that are taking place now have a new standard of care."
Gilead’s first-quarter financial results also received a thumbs-up from analysts for revenues of $5.5 billion, an increase of 5% compared to the same period in 2019. The company said sales were boosted in the period due to an estimated $200 million in revenue related to increased customer buying patterns and patient prescription trends, primarily in the U.S., due to the coronavirus disease pandemic. Sales related to HIV products were $4.1 billion compared to $3.6 billion for the same period in 2019. The increase was primarily driven by higher sales volume as a result of the continued uptake of Biktarvy (bictegravir 50 mg/emtricitabine 200 mg/tenofovir alafenamide 25 mg). Chronic hepatitis C virus (HCV) product sales were $729 million for the first quarter 2020 compared to $790 million for the same period in 2019.
Life other than COVID-19
Proving that investors have not lost sight of biopharma’s innovative potential in other therapeutic areas, Incyte Corp. was the group’s leading gainer, with its shares (NASDAQ:INCY) vaulting 33% in April on the strength of the FDA granting accelerated approval for the company’s Pemazyre (pemigatinib), the first treatment approved for adults with certain types of previously treated, advanced cholangiocarcinoma. As a condition of its continued U.S. approval, the Wilmington, Del.-based company will be required to complete and submit the results of a randomized trial demonstrating an improvement in progression-free survival.
In tandem with the approval, Foundation Medicine Inc.'s genomic profiling assay, Foundationone CDx, gained the FDA's blessing for use in identifying patients with FGFR2 fusions and select rearrangements who may benefit from treatment with Pemazyre.
Alnylam Pharmaceuticals Inc.’s shares (NASDAQ:ALNY) also performed well, closing the month up 21% on the strength of a $2 billion deal it struck with the Blackstone Group Inc., which is acquiring 50% of royalties owed to Cambridge, Mass.-based Alnylam on the global sales of inclisiran, which is designed to treat hypercholesterolemia. The twice annually injectable proprotein convertase subtilisin/kexin type 9 (PCSK9) gene inhibitor is being reviewed by the FDA and has the potential to become the first siRNA-based PCSK9 inhibitor to win U.S. approval.