While biopharmaceutical research is currently concentrating on the threat posed by the COVID-19 pandemic, the disease has provided a sharp reminder that our focus should not be lost on infectious diseases as a whole, along with the growing global problem of antibiotic resistance (AMR), which has the potential to dwarf COVID-19 in terms of deaths and economic costs, according to the International Federation of Pharmaceutical Manufacturers and Associations (IFPMA).
This month, for example, to help rebuild the thin product pipeline, an initiative of the IFPMA, the AMR Action Fund, has been created that brings together 23 pharmaceutical companies raising $1 billion that will be used for the clinical development of antibiotic drugs. Specifically, the fund aims to bring several new therapeutics through to approval by 2030.
It will be welcome news to biopharma companies in this sector, researching new drug classes that will be needed to replace the diminishing arsenal of effective therapies to combat drug-resistant bacteria and fungi. After experiencing indifferent investor sentiment last year, there has been a massive turnaround with heightened interest on companies that have therapeutics in their pipelines to combat the spread of the coronavirus infection.
The upward trend of the BioWorld Infectious Diseases index reflects the renewed enthusiasm for companies in the group. At market close on July 13, it was recording a year-to-date increase in value of 173%. (See BioWorld Infectious Diseases index, below.)
The remarkable performance has been driven by companies developing COVID-19 therapies. South San Francisco-based Vaxart Inc., which is developing oral recombinant protein vaccines administered using a room temperature-stable tablet, rather than an injection, is a case in point. It began the year as a “penny stock.” In late January, it announced that it had initiated a program to develop a COVID-19 vaccine candidate based on its technology platform, and its stock price has been on the rise ever since, with its shares (NASDAQ:VXRT) jumping a massive 3,363%.
The valuation has been driven by several major announcements from the company, including the selection of its oral COVID-19 vaccine to participate in a nonhuman primate challenge study, organized and funded by Operation Warp Speed (OWS), a U.S. initiative that aims to supply 300 million doses of a safe, effective vaccine for COVID-19 by January. The study is designed to demonstrate the efficacy of its oral vaccine candidate.
Leveraging the growing interest in its technology, Vaxart recently went to market and successfully raised gross proceeds of about $90 million through its at-the-market facility.
On a tear
Shares of index group member Gaithersburg, Md.-based Novavax Inc. (NASDAQ:NVAX) have also been on a tear, increasing a whopping 2,521% year to date (YTD). This month, the company was also awarded $1.6 billion in OWS funding.
The award will assist the company in completing, by the end of the year, late-stage clinical development, testing, manufacturing, stockpiling and delivery of 100 million doses of NVX-CoV2373, its candidate engineered from the genetic sequence of SARS-CoV-2. The testing specifically includes a pivotal phase III trial composed of 30,000 people that is set to begin this fall to determine the vaccine’s safety and efficacy.
J.P. Morgan analyst Eric Joseph upgraded the company’s price target on the heels of the OWS announcement, noting that “we view NVX-CoV2373 participation as a validating signal for the vaccine candidate and the company’s overall recombinant nanoparticle vaccine platform.”
Dynavax Technologies Corp. has also seen its shares (NASDAQ:DVAX) jump about 49% since the start of the year. Last week, the company entered a collaboration with Quebec City, based Medicago Inc., which is creating vaccines using plant-based technologies. The research will evaluate the combination of Medicago's Coronavirus Virus-Like Particle (CoVLP) with Dynavax's advanced adjuvant, CpG 1018. The companies expect to be able to deliver up to 100 million doses by the end of 2021.
Following the announcement, the companies reported July 14 that the first participants have been dosed in a phase I trial evaluating the vaccine candidate. The randomized, partially blinded, prime-boost, staggered dose-escalation study is intended to assess the safety, tolerability and immunogenicity of the vaccine at three dose levels (3.75 µg, 7.5 µg and 15 µg VLP) unadjuvanted or adjuvanted with either CpG 1018, or another company’s adjuvant, in approximately 180 healthy subjects, ages 18 to 55, who have been tested for the absence of SARS-CoV-2 antibodies. Preliminary safety and immunogenicity results are expected in October. Medicago is also planning a phase II/III trial for later this year.
Companies working on COVID-19 vaccines have had no difficulty raising cash. In June, Novavax entered an agreement to sell series A convertible preferred stock, convertible into 4.38 million shares, to an investment fund affiliated with RA Capital Management in a private placement for gross proceeds of approximately $200 million.
Vir Biotechnology Inc., of San Francisco, which has also received a great deal of investor enthusiasm of late for its investigational RNAi therapeutic candidates targeting the SARS-CoV-2 genome, closed a public offering of about 8.2 million shares, including the underwriters' option to purchase up to about 1.1 million additional shares, at $42 per share, grossing the company approximately $345 million. Vir’s shares (NASDAQ:VIR) have shot up by 300% YTD.
The demise of several companies developing antibiotics in the past year emphasizes the fact that developing new drugs is not easy. The latest company to hit a bump in the road is Iterum Therapeutics plc, with two phase III stumbles of its compound, sulopenem. The penem anti-infective, with oral and I.V. formulations, failed to achieve statistical noninferiority relative to ertapenem in treating complicated urinary tract infection. The company’s stock (NASDAQ:ITRM) nosedived in June on the news and shares are trading down 75% since the beginning of the year.
At the end of June, the Dublin-based company announced that it expected to raise gross proceeds of $5 million from a registered direct offering. Institutional investors agreed to purchase about 3.4 million ordinary shares for $1.48 each. The company also issued warrants to purchase up to about 1.7 million ordinary shares in a private placement.