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As of Tuesday, there have been more than 50.9 million confirmed cases of the new coronavirus worldwide and 1.26 million deaths. In the US alone, researchers estimate that the full economic impact (healthcare costs, lost productivity from lockdowns and quarantines, travel disruptions, etc.) of the rampant spread of the SARS-CoV-2 virus is likely it will reach $ 16 billion. And the pain won’t end in 2020: The Congressional Budget Office projects a total of $ 7.6 trillion in lost production over the next decade, meaning more Treasury deals, austerity measures, higher taxes, or more will be needed. all three to compensate. because of the budget deficit.
Fortunately, Pfizer (NYSE: PFE) Y BioNTech (NASDAQ: BNTX) have developed a COVID-19 vaccine candidate (BNT162b2) to help end the pandemic. BNT162b2 is currently the only experimental vaccine that has shown efficacy in large-scale studies, and it could become the first candidate licensed for use by regulatory agencies around the world.
But how good is the vaccine data and why is it important to current or potential investors in any of the companies?
Image source: Getty Images.
Phase 3 trial results
Pfizer and BioNTech announced the interim results of their phase 3 trial on November 9. The global phase 3 trial involved 43,538 participants whose geographic location put them at high risk of acquiring COVID-19. During the study, participants were assigned to receive either two doses of BNT162b2 or a placebo. After enough trial members became infected with the virus, the researchers compared the rate of COVID-19 infection between the groups.
The first interim analysis of the trial indicates that after 94 confirmed COVID-19 cases in the overall study, the vaccine was at least 90% effective in preventing a viral infection 28 days after starting the two-dose schedule. In other words, the vast majority of confirmed illnesses come from the placebo group. No serious safety issues were reported. The two companies wait until at least the third week of November to obtain safety data before applying for an Emergency Use Authorization (US) from the US Food and Drug Administration.
What do these results mean for investors?
The study protocol conveys that if BNT162b2 demonstrates at least 80% efficacy at the current analysis stage, the p-value for the vaccine data must be less than 0.037. The p-value is a statistical measure that generally must be less than 0.05 for a finding to be significant. Given that we know that BNT162b2 demonstrated greater than 90% efficacy, it is likely that the p-value of the results is much less than 0.037, which means that the candidate probably achieved strong statistical significance. Note that the FDA only requires coronavirus vaccines to be 50% effective for approval.
As a result of these results above and beyond, it is more than likely that the study will be successful in the final stage of the analysis and that the treatment will receive an EUA from the FDA. With such a high level of effectiveness, the Pfizer and BioNTech candidate sets a high competitive bar for its competitors, including those of Modern (NASDAQ: mRNA), AstraZeneca (NASDAQ: AZN)Y Novavax (NASDAQ: NVAX).
Given that the study was carried out in an open environment, it could be deduced that the viral mutations did not materially affect the efficacy of the vaccine; patients were exposed to the currently circulating strains of the virus, rather than staying in a “closed” space away from potential mutations. If true, this is wonderful news, as it would mitigate or eliminate a key concern about coronavirus – that ongoing mutations would render experimental vaccines based on older variants of the virus ineffective.
Another crucial detail: Forty-two percent of the trial participants came from various racial and ethnic backgrounds. Generating efficacy data from all population groups increases Pfizer and BioNTech’s ability to generate revenue, as well as immunity, internationally, rather than just in a specific part of the world.
On the edge of the goal
By the end of 2021, Pfizer and BioNTech expect to produce 1.3 billion doses of BNT162b2. In other words, theoretically speaking, enough for 650 million people; the population of the United States is about 326 million. However, getting the doses to those millions of people could be the biggest challenge. More than half of the world’s vaccines are wasted due to logistics or transportation problems, according to the World Health Organization (WHO).
Given the price of $ 20 per dose, Pfizer and BioNTech have the potential to generate $ 26 billion in sales of BNT162b2 next year; the two companies will share their gross profits equally through their agreement. While this is not news to investors, the likelihood of hitting that income figure has increased significantly after this data announcement.
Thirteen billion dollars would be a pretty significant opportunity for BioNTech, which is currently in the development stage and has no product revenue. But it would also be significant for large-cap Pfizer, which is experiencing increased competition from generics for its key products, driving its revenue down 4% year-over-year to $ 12.1 billion in the third quarter of 2020 ( Pfizer is working on a spin-off of its generics business.)
So far, the two companies have obtained more than 573 million pre-orders of BNT162b2 from 13 countries and the EU, as well as options to supply an additional 600 million doses of the vaccine. I highly recommend that biotech investors consider the actions of Pfizer and BioNTech as they (likely) begin to fulfill those orders, as well as securing more supply agreements with other countries based on their excellent vaccine science. .
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