The sector – and companies – holding their own

Written by Louisiana Salge on 24th Mar 2020

Bringing you the Good in money at a time when there’s little to cheer, a guest post from Louisiana Salge at EQ Investors, a Good Egg company, on the healthcare companies bucking the sharp downward market trends. 


In the midst of the coronavirus (COVID-19) pandemic EQ wants to highlight some of the companies we invest in that are leading the charge to be beat COVID-19. Whether that’s providing virus testing, treatments to alleviate the symptoms or working on a possible vaccine.

There are more than 20 companies and public sector organisation worldwide racing to find a cure and preventing further spread of the disease.

As you might expect, these companies have seen significant share price increases, bucking the downward trend in the broader market. Biotech firms are normally disadvantaged in market sell-off, perhaps another sign of the unique factors at play.

Testing

Given the urgent need for larger scope of testing as the outbreak continues, western diagnostics companies have scaled up their point of care testing on strands of the virus genome. These include:

Integrated DNA Technologies (IDT) a sub-company of Danaher Group, has been successful at largely scaling up the manufacturing of a key component of genetic testing, a primer and probe kit, which assists in DNA analysis of patient samples. This will enable about five million tests per week, mostly in the US.

Thermo Fisher Scientific this week announced that it expects ramp up its testing kit production, used to detect a nucleic acid from the SARS-CoV-2 virus that causes coronavirus. It already has about 1.5 million tests available to ship and aims to match IDT with five million new tests per week going forward.


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Treatments

Regeneron Pharmaceuticals in partnership with Sanofi has launched trials of its commercially available arthritis drug Kevzara for use in COVID-19 patients. The two partners believe the existing medication could become helpful in treating the inflammation in the lungs observed in severe cases of the infection. The benefit that Regeneron has is that the drug is already produced on a commercial scale – so once the treatment link has been established through the trial, it can start treating patients immediately.

Roche the global pharmaceutical company has also started to use its existing arthritis drug Actemra on COVID-19 patients, with recent backing from Chinese authorities. The company will start worldwide trials on hospitalised patients with severe COVID-19 pneumonia, beginning in April.

Roche’s diagnostics division is also offering genetic tests for coronavirus diagnoses, after receiving emergency FDA approval.

Vaccine

Gilead Sciences is a biotech company that provides on antiviral drugs for the treatment of HIV, hepatitis and influenza, has announced a test phase 3 antiviral drug, remdesivir, on patients with COVID-19. These trials tend to intend to enrol around 1,000 patients, mostly in Asia and clinicaltrials.gov states that the trials are expected to be completed in May. This would be very rapid, but if positive, global drug regulators could accelerate approval of the drug.

Ursula von der Leyen, European Commission President and a trained doctor herself said a vaccine for COVID-19 could be available before the autumn. For this to happen, regulatory processes need to be fast-tracked and it appears this is happening across the board.

In the Ebola crisis, widespread vaccine roll-out came after the number of new infections were on the decline. However, a vaccine could still save many lives, especially if the virus becomes perennially circulating – like the flu.

Healthcare focus

Compared to indices, the EQ Positive Impact Portfolios have a strategic overweight to healthcare. We invest in research & development focused biotechnology firms as well as larger pharmaceutical firms that have the potential capabilities to execute on the speed and scale-up challenges of vaccine manufacturing once one is approved.

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