Perhaps it’s time for some good news. First of all, just today biotherapeutics developer Avacta has announced its partnership with Cytiva, formerly known as GE Healthcare Life Sciences, to develop and manufacture a point-of-care (POC) rapid test to diagnose COVID-19 infection.
Things are moving exceptionally fast in the pharma and biotech fight against COVID-19.
Meanwhile, we recently helped raise £14m for drug discovery and development firm Synairgen. The funding will be used by the firm to conduct a vital phase II clinical trial of its candidate SNG001 in COVID-19 patients – a trial that received expedited approval by UK authorities and within days of the fundraise has already dosed its first patient.
Our clients Avacta and Synairgen are not the only protagonists in this rapidly evolving story. Things are moving exceptionally fast in the pharma and biotech fight against COVID-19.
Firstly, the pharma side. With regulatory approvals getting rushed through as with Synairgen’s candidate, naturally, our attention turned to some of the other drug development programmes on the radar.
To caveat, while companies are working on a vaccine for COVID-19, these could take 12-18 months to arrive, if they arrive at all. Nevertheless, in the shorter-term, companies and institutions are fast-tracking investigation and development of therapies to treat COVID-19 and its associated complications.
Never before has the academic world and industry mobilised together in such a manner
SNG001 (Inhaled interferon beta – Synairgen)
Synairgen’s SNG001 is a formulation of interferon beta for direct delivery to the lungs via nebulisation. A double-blind, placebo-controlled trial of SNG001 in mild-moderate COVID-19 patients began in late March. It has been found that the addition of exogenous IFN-beta before or during viral infection of lung cells can either prevent or greatly diminish cell damage and viral replication, respectively.
SNG001 was identified in the WHO’s landscape analysis of therapeutics on 17 February 2020 as the only Phase II/III observational therapy delivered by the inhaled route. finnCap helped Synairgen raise £14m at the end of March and those funds will be used to fund the trial activity, manufacture SNG001 and also for working capital requirements.
Remdesivir was originally developed for Ebola, but this antiviral has become one of the most promising prospects for COVID-19 treatment. Two new phase III trials expand ongoing research into remdesivir against COVID-19, including two trials in China, as well as a trial in the US and a recently announced trial in the UK. Results from the Chinese trial are expected in April.
Remdesivir is not yet approved anywhere in the world. It has demonstrated broad-spectrum antiviral activity in both in vitro and in vivo animal models. Gilead sought orphan drug status for the drug as a possible treatment for COVID-19, but this week asked the agency to rescind the status, upon accusations of COVID-19 profiteering.
Actemra (tocilizumab - Roche)
Roche’s anti-inflammatory drug Actemra recently received a rapid Chinese approval in COVID-19 patients with lung complications. Roche donated $2m worth of the drug to China to help manage its outbreak.
Preliminary findings from a single-arm, 21-patient Chinese trial found that COVID-19 patients experienced rapidly reduced fevers, with 75% of patients experiencing a reduced need for supplemental oxygen, after treatment with Actemra.
Avigan (faviparavir - Fujifilm)
This Japanese flu drug received Chinese approval for treating COVID-19 after delivering encouraging outcomes in a trial of 340 patients in Wuhan and Shenzhen. According to reports, the patients in Shenzhen who were administered faviparavir turned negative for the virus after a median of four days after becoming positive, as compared to a median of 11 days for patients who were not treated with the drug. Additionally, X-rays showed improvements in the lung condition of 91% of the patients who were administered favipiravir, as compared to 62% of patients who were not treated with the drug.
Chloroquine and hydroxychloroquine (generic – various companies)
Chloroquine is an antimalarial that has been around for 70 years, and hydroxychloroquine is considered to be a less toxic form.
In a small French study of chloroquine in 24 COVID-19 patients, of those who received the medicine, only 25% tested positive for the virus after six days. Of those who did not receive the treatment, 90% tested positive after six days. The French government plans to run larger studies.
US President Donald Trump declared chloroquine “very powerful” with “very, very encouraging early results” and at request of the US government, Teva has agreed to donate over six million doses of hydroxychloroquine sulfate tablets across the country. The University of Minnesota plans to run a trial of hydroxychloroquine in 1,500 volunteers, although recruitment has been slow thus far.
Companies and institutions are fast-tracking investigation and development of therapies to treat COVID-19
Antigen and antibody tests
The antigen testing currently being carried out looks at whether a person currently has the virus.
Another type of test, an antibody test, could detect if a person had the virus in the past, and has since recovered. Antibody tests would help work out how widespread the disease has been and whether individuals, especially key workers, are safe to return to work.
Firstly, Avacta announced that it has entered into a collaboration with Cytiva, formerly known as GE Healthcare Life Sciences, to develop and manufacture an Affimer-based point-of-care (POC) rapid antigen test to diagnose COVID-19 infection, with the intention of screening large populations and addressing the current hurdles and bottlenecks that exist for scaling such tests globally. Drawing on the global scale of Cytiva, which will ultimately be needed to bring such a test rapidly to the market, this collaboration highlights Avacta’s diagnostics capabilities as well as the potential to unlock significant near-term value. We are making no changes to forecasts or target price, preferring instead to monitor progress in the rapidly changing competitive landscape. Suffice to say, the market opportunity for a cost-effective high volume test is significant (>$1bn). The upside, if successful is substantial, as illustrated by the c£150m value created by Novacyt’s COVID-19 antigen test.
In terms of antibody tests, in early March, Mologic announced that it had been awarded a £1m grant by the UK government to develop a rapid diagnostic test for COVID-19. On March 26, the company announced that it has initiated early validation of the test. Similarly, SureScreen Diagnostics have developed a £6 antibody test which they claim is 98% accurate and works in 10 minutes. BioSure have also developed an at-home finger prick test that takes 15 minutes.
The government has agreed deals to buy 17.5 million antibody testing kits. They are not yet available as they are being validated.
The antigen testing currently being carried out looks at whether a person currently has the virus. Another type of test, an antibody test, could detect if a person had the virus in the past
Is lockdown working?
It is too early to measure the impact our lockdown measures have had; we almost certainly have not reached our peak yet. There was a fall in the number of new deaths on March 30 and 31, but on 2 April the UK reported its highest daily increase in deaths to date. We can expect more fluctuations as time goes on and unless a vaccine or effective treatment is released, there appears to be no ‘exit strategy’ to coming out of lockdown.
In any case, ‘flattening the curve’ and social distancing in order to reduce the spread of disease will help to prevent the NHS from being overrun, saving many lives in the process. It also gives the country time to prepare and increase NHS ICU capacity and hospital beds, such as with the conversion of the ExCel Centre in London into the temporary Nightingale Hospital, which opened on 3 April and will treat up to 4,000 COIVD-19 patients.
Another example is the UK government’s recent order for 15,000 new ventilators. 10,000 of these will be supplied by Ventilator Challenge UK, a consortium of engineering firms including Rolls-Royce, Airbus, McLaren, Ford, and BAE systems. An order for 10,000 machines from Dyson was previously announced, although Dyson’s machine is a completely new design and will require regulatory approval –whether it will receive this is less clear.
On March 20, Inspiration Healthcare (AIM:IHC) announced further ventilator orders from the NHS, with a combined total value of over £4m, and is working with suppliers from various countries to expedite delivery as soon as possible. It typically ships medical equipment to the UK but these devices will be shipped by air as time is of the essence.
If the above orders, and other orders from overseas are supplied, it would take the total number of ventilators in the NHS to 41,000, well above the 30,000 ventilators the government has estimated it will need to cope with the COVID-19 outbreak.
While the COVID-19 crisis undoubtedly presents challenges for the life sciences industry, it also provides opportunities for companies who can develop products and services to assist in controlling the outbreak. Never before has the academic world and industry mobilised together in such a manner evidenced by the consortia pulled together to produce much needed additional ventilator capacity, PCR testing capacity, antibody tests and new therapies. And never before has the NHS been challenged on this scale, but it has responded in a way that inspires hope and shown the benefits of bringing together public and private sector providers.
Within the AIM life sciences sector, we have already seen companies such as Synairgen, Avacta, Byotrol, Tristel, Inspiration Healthcare, LiDCO, Novacyt and Faron Pharmaceuticals quickly respond to the crisis. For many, the crisis could be a defining moment in their corporate development, demonstrating to the broader industry and investors alike their core capabilities and competencies.
For some, the coronavirus outbreak will bring about a permanent change to their futures as well as in the way that healthcare systems work; for example, new disinfection protocols will be embedded into hospital SOPs in markets such as China that should ensure sustained growth and should be reflected in higher multiples and valuations.
Contact our Life Sciences Team
Geoff Nash, Corporate Finance Director
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Mark Brewer, Research Director
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Arshad Ahad, Research Analyst
020 7220 0552 | firstname.lastname@example.org