Biotech and Big Pharma Join Fight Against Covid-19. Why They Need to Do More, – Barron’s

Nearly every U.S. industry is struggling with the effects of the pandemic. Only one has a shot at stopping the virus itself.

Over the past decade, biotechnology firms and pharmaceutical companies have stockpiled an armament of scientists, laboratories, and capital in the billions of dollars. Those labs could end the current global nightmare of Covid-19.

Are they doing enough?

Now, after a slow start, there are nearly 60 programs under way to develop a Covid-19 treatment and more than 40 to develop a vaccine, by both commercial and noncommercial labs, according to an accounting by the Milken Institute.

Brian Abrahams, an analyst at RBC Capital Markets, thinks the biotech industry should be doing much more.

We havent seen the broader biotech community come together in a really cohesive way to try to tackle this problem, Abrahams said in an interview on Monday. There are hundreds of companies, tons of talent, and a lot greater understanding of biology and drug discovery than weve ever had.

In recent days, signs of an industrywide movement, like the one Abrahams called for, have begun to emerge, with a biotechnology industry group holding a virtual gathering to coordinate a response.

And generic-drug companies have now rushed to make available a medication that has shown early promise as a Covid-19 therapy.

If youre a mid- or large-cap company, I think its almost a societal duty to be making some effort to leverage whatever expertise you might have.

Its my personal belief that this is the mission of the pharmaceutical industry, says Sol Barer, chairman of the board of Teva Pharmaceutical Industries (ticker: TEVA) and a co-founder of the biotech firm Celgene, which was recently acquired by Bristol-Myers Squibb (BMY). We are here to discover, develop, and commercialize drugs, especially for serious, fatal diseases.

For drugmakers of all types, Covid-19 offers a chance to rehabilitate their image before an American public that has grown increasingly frustrated with high prices and ethical scandals like the opioid crisis and generic-drug price-fixing allegations.

The pharmaceutical industry does have an opportunity here to both help and also to accomplish a very important aspect of rebranding, says Dan Mendelson, founder of Avalere Health, a health-care consulting firm.

It remains unlikely that companies will make money off their Covid-19 programs, but burnishing the industrys image will bring its own value.

Even with no profit motive, says Abrahams, companies should be putting virtually everything aside to work on Covid-19 treatments. If youre a mid- or large-cap company, I think its almost a societal duty to be making some effort to leverage whatever expertise you might have, he says.

Among the Covid-19 research programs in progress are a number of attempts to use messenger RNA to make vaccines that train the body to defend against the virus. Biotech firm Moderna (MRNA) already has an mRNA vaccine in the clinic. BioNTech (BNTX) is working with Pfizer (PFE) and a Chinese company on their own version, Translate Bio (TBIO) is developing one with Sanofi (SNY), and so is the private firm CureVac

Therapeutics under investigation include repurposed antivirals such as Gilead Sciences (GILD) remdesivir and AbbVies (ABBV) Kaletra. Other companies are working on antibody therapies, including Regeneron Pharmaceuticals (REGN) and Vir Biotechnology (VIR), which is teaming up with Biogen (BIIB).

According to Jeremy Levin, CEO of Ovid Therapeutics (OVID) and chairman of the board of the industry group Biotechnology Innovation Organization, or BIO, some 45 biotechs have Covid-19 programs.

Still, that represents only a portion of biotech. Much of the biopharmaceutical industry, like many other industries, has been shut down by the pandemic.

Laboratories are operating with skeleton crews. Companies like Eli Lilly (LLY) and Bristol-Myers have delayed the starts of new drug clinical trials, and armies of salespeople have been effectively grounded. That leaves a lot of capital sitting there while people are dying.

The reality is, from a commercial standpoint, companies with marketed products are not really going to be able to spend the same amount of money on sales costs now, with the country in virtual lockdown, nor will they be able to continue most of their clinical trials until this passes, Abrahams says. Theres a natural bandwidth expansion.

BIOs Levin says that there is a limit to how many biotech companies can tackle Covid-19.

Its very difficult for companies to switch on a dime, he says. If youre a cancer company, its very difficult to switch to being an antiviral company. Half of biotechnology, Levin notes, is focused on cancer.

Still, Levin says, in recent days, the sector has been working to coordinate its Covid-19 response. On Tuesday and Wednesday, BIO organized a virtual summit meant in part to connect the companies working on Covid-19 with government agencies.

From my perspective, theres no one solution, he says. Its a comprehensive Marshall Plan, which goes across all of these companies.

Levin says that one way to bring more companies into the effort is by encouraging collaborations. He highlights an effort by Vir, which focuses on infectious disease, and Alnylam Pharmaceuticals (ALNY), which specializes in a modality called RNA interference, on an RNAi approach to curing Covid-19.

Outside of biotechnology, the pharmaceutical giants have announced their own efforts.

And in a wave this week, generic drugmakers announced plans to ramp up productions of hydroxychloroquine, an antimalarial drug that has shown promise as a Covid-19 treatment. Teva alone donated six million doses of the drug.

The way we can help is, if there are drugs now that are available and generic, we can help supply them in significant quantities, Tevas Barer says. If we make it, we will supply it, we will supply it quickly.

Write to Josh Nathan-Kazis at josh.nathan-kazis@barrons.com

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Biotech and Big Pharma Join Fight Against Covid-19. Why They Need to Do More, - Barron's