The curtain is about to drop on a turbulent year laid waste by a raging pandemic that remains out of control heading into 2021. With the approval and massive roll out of two novel vaccines, there is every reason to hope that better times are on the horizon.
The exceptional and fast response in bringing safe and effective vaccines and therapeutics to the public has focused the spotlight squarely on biotechnology innovation this year. Not only have companies involved in this massive endeavor benefited, but so has the sector as a whole, in particular small- and medium-sized drug developers. The outlook on those biopharma companies, notably during the fourth quarter, has elevated their share values.
The BioWorld Drug Developers index is currently tracking up more than 9% in value so far this month and is on target, with a handful of trading days left before the end of the year, to close up over 35% for 2020, well ahead of the general markets, with the Dow Jones Industrial Average set to close out the year with a small single-digit percentage gain. (See BioWorld Drug Developers 2020 index.)
It will come as no surprise that the group’s leading performer so far in 2020 is Cambridge, Mass.-based Moderna Inc., which received FDA emergency use authorization (EUA) for its COVID-19 vaccine, mRNA-1273. Moderna's vaccine is the second to receive an EUA, following the Dec. 11 award to Pfizer Inc. and Biontech SE for BNT-162b2. Both are products of mRNA technology and both posted similar efficacy numbers. The Moderna vaccine, to be administered in two doses one month apart, is for those age 18 and older while the Pfizer-Biontech vaccine is for those age 16 and older.
The Moderna vaccine is based on the SARS-CoV-2 spike glycoprotein antigen encoded by RNA and formulated in lipid nanoparticles. About 20 million doses will be delivered in the U.S. by the end of December and the rest in the first quarter of 2021, according to the company. Its shares (NASDAQ:MRNA) have gained significant investor support this year, trading up a massive 617% year to date (YTD).
Denali’s shares (NASDAQ:DNLI) are trading up 391% as a result of a steady flow of positive news. The South San Francisco-based company received a positive market reaction when it announced it had closed a lucrative leucine-rich repeat kinase 2 (LRRK2) collaboration and license agreement and a right of first negotiation, option and license agreement with Biogen Inc. Under the terms of the deal, Denali will receive $560 million up front. The companies will co-develop Denali’s small-molecule inhibitors of LRRK2 for Parkinson’s disease and co-commercialize Denali’s LRRK2 products in the U.S and China with shared responsibility for worldwide development costs as well as profits and losses for commercialization in the U.S. and China. Denali will be eligible to receive up to $1.125 billion in potential milestone payments.
In addition to highlighting that deal, Ryan Watts, Denali’s CEO, commented in the company’s third-quarter financial and business update that the firm had “made significant progress across multiple programs enabled by our transport vehicle technology platform, including our lead enzyme transport vehicle, iduronate 2-sulfatase program, which is evaluating DNL-310 in a phase I/II trial in patients with Hunter syndrome.”
Not far behind in terms of percentage gain is TG, of New York, with its shares (NASDAQ:TGTX) up a massive 387% YTD. The company also had several positive catalysts, including reporting this month that both its phase III studies of ublituximab, an anti-CD20 monoclonal antibody, met their primary endpoints of significantly reducing the annualized relapse rate in multiple sclerosis (MS) patients. Both the Ultimate I and II studies hit their primary endpoint as ublituximab showed a statistically significant reduction in annualized relapse rate (ARR) during a 96-week period, resulting in a “p” value of <0.005 for each. The treatment also resulted in an ARR of <0.1 in both, with a relative reduction in ARR of approximately 60% and 50%, respectively, over teriflunomide. The company estimated it would file a BLA for the compound in the middle of 2021. H.C. Wainwright analyst Edward White wrote Dec. 10 that he foresaw that submission will ultimately be successful.
Leveraging the 40% jump in its shares on the news, the company priced an upsized underwritten public offering that raised $275 million in gross proceeds. The net proceeds will support continued development of ublituximab, TG-1101, a glycoengineered monoclonal antibody targeting an epitope on the CD20 antigen found on mature B-lymphocytes, and for developing umbralisib, which is being reviewed by the FDA for accelerated approval as a therapy for patients with previously treated marginal zone lymphoma who have received at least one prior anti-CD20-based regimen or follicular lymphoma who have received at least two prior systemic therapies.