New twists and turns continue in the fight to develop a COVID-19 vaccine.
Last week, Modern (NASDAQ: MRNA) reported more excellent results from a phase 1 study of its vaccine candidate mRNA-1273. This week, medical journal The lancet published positive results for AZD1222, the COVID-19 vaccine candidate developed by AstraZeneca (NYSE: AZN) and Oxford University. Pfizer (NYSE: PFE) and BioNTech (NASDAQ: BNTX) It also announced more good news for the experimental coronavirus vaccine BNT162b1.
There have also been two recent findings that could affect all drug manufacturers that develop SARS-CoV-2 vaccines. Could these findings dramatically change the outlook for stocks of COVID-19 vaccines?
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Problematic mutations
Earlier this month, scientific journal Cell He published an article that presented evidence that a mutation of the new coronavirus called D614G makes the virus more infectious. This mutation appears to have occurred relatively soon after the appearance of SARS-CoV-2 in Wuhan, China. But it is now present in up to 97% of COVID-19 tests.
Why mutations can be problematic for COVID-19 vaccines? Just think about how current flu vaccines work. Every year, healthcare experts try to predict which flu strains will be most prevalent. Different strains exist due to genetic mutations in viruses that cause influenza. The flu shots given for that season target those strains. But experts are not always right. This is why people sometimes get a flu shot but still get the flu.
There is good and bad news when it comes to mutations in the new coronavirus. The good news first: The D614G mutation should not affect developing COVID-19 vaccine candidates. This mutation occurs in a different region of the spike protein than that based on most experimental vaccines.
What is the bad news? Future mutations in SARS-CoV-2 could potentially make vaccines developed by AstraZeneca, Moderna, and others less effective. Dr Aileen Marty, an infectious disease expert at Florida International University, warned that other mutations could delay the development of an effective COVID-19 vaccine. Vaccines may also become less effective after widespread use.
Losing immunity?
Several studies in recent months have suggested that patients recovering from COVID-19 quickly lose their neutralizing antibodies that protect against the new coronavirus. Last week King’s College London published the most comprehensive research results on this effect so far. And those results raised some concerns.
Neutralizing antibodies are typically produced in patients diagnosed with COVID-19 and reach peak levels after a few weeks. However, neutralizing antibody levels begin to decrease, sometimes significantly.
Patients with SARS and MERS, two other members of the coronavirus family, can still have neutralizing antibodies almost a year later. But the coronavirus that causes COVID-19 appears to be quite different; Neutralizing antibodies can practically disappear in a much shorter period of time.
The obvious problem is that immunity for patients recovering from COVID-19 may not last more than a few months. However, this is not an inevitable conclusion.
With some infectious diseases like smallpox, antibody levels can drop significantly, however, people who have recovered still enjoy immunity. A similar effect could be seen with SARS-CoV-2. It is also possible that immune cells called memory T cells may be as important in providing immunity against the new coronavirus as neutralizing antibodies. The King’s College London study did not assess T-cell levels in patients.
Changing opportunities
Both findings could change the market dynamics for COVID-19 vaccines (and the stocks of the companies that manufacture them). For example, genetic mutations that make the new coronavirus more infectious or more severe would surely lead to increased demand for COVID-19 vaccines. People who might be reluctant to get a vaccine might change their minds if the pandemic worsens.
But what if genetic mutations occur that make COVID-19 vaccines ineffective? Drug makers like AstraZeneca, Moderna and Pfizer could participate in an ongoing race to develop modified vaccines to keep up with new viral strains. And the demand would not be so high for vaccines that have a high probability of not working.
However, perhaps a greater impact can be experienced for COVID-19 vaccine companies if immunity lasts only a few months after vaccination. It is possible that this could increase sales for drug manufacturers, as more doses of vaccine would be needed each year. On the other hand, it is not ruled out that many people give up on a short-acting vaccine entirely.
Regardless of what happens, any of the drug makers that eventually win regulatory approval for their respective COVID-19 vaccine candidates should capture part of a multibillion-dollar mass market. But how big that market will be really depends on the twists and turns that might be on the way.
