Recent Advances in the Battle Against COVID-19
The world breathed a collective sigh of relief at Pfizer and BioNTech’s announcement of a COVID-19 vaccine candidate passing phase 3 trials. In response, the markets roared on November 9, 2020 with a massive rotation from technology/stay-at-home-stocks to small caps, energy, and industrials. It was a great morning for the stock market record books.
More positive news in the fight against COVID-19 came after the November 9, 2020 market close. That evening, Eli Lilly & Co’s (NYSE: LLY) antibody treatment received emergency F.D.A. approval. The authorization applies only to people newly infected with the SARS-CoV-2 virus, and the agency said it should not be used in hospitalized patients. The company indicated its treatment, called bamlanivimab, should be administered as soon as possible after a positive test and within 10 days of developing symptoms.
Eli Lilly & Co. Chairman and Chief Executive Officer David Ricks discussed his company’s COVID-19 antibody therapy, which could reduce hospitalizations of patients with underlying conditions and in high risk groups. However, according to The New York Times, Eli Lilly said it expects to have enough doses to treat one million people by the end of the year. That means, even in the best-case scenario, there won’t be nearly enough doses to curb a virus that is now infecting an average of over 116,000 people a day in the United States.
Eli Lilly, Pfizer, and BioNTech aren’t the only firms investors should monitor. Other companies working on antibody therapies that we believe are going to be important in the fight against COVID-19 include ImmunoPrecise Antibodies (TSXV: IPA, OTC: IPATF), Regeneron Pharmaceuticals (NASDAQ: REGN), Vir Biotechnology (NASDAQ: VIR), Twist Bioscience (NASDAQ: TWST), and Sorrento Therapeutics (NASDAQ: SRNE). We highlight their year-to-date stock returns below and note all these stocks have been volatile with news-flow.
Exhibit 1: Some COVID-19 Related Stocks’ Year-To-Date Returns
A Light in the Darkness – Examining the Vaccine Solution
We, like most people, are hopeful that this Pfizer/BioNTech vaccine candidate and other advances like antibody therapies will eventually help us return to the normal activities that we’ve paused since March 2020. That said, while recent market moves signal that COVID-19 risks have passed, we believe that the virus could continue to impact the world for some time to come. Although we remain optimistic regarding recent therapeutic and vaccine advances, we recognize that the COVID-19 healthcare toolkit will likely require more tools; it will also need rapid testing kits, hand sanitizers, social distancing, and virus detection systems.
Echoing our view about COVID-19’s continued risks, Mr. Brian Bloom, co-founder, chairman and chief executive officer at Bloom Burton & Co. (a healthcare sector focused investment bank) suggested, “This is not the light at the end of the tunnel … this is a light in the darkness”. Taking Mr. Bloom’s statement further, let’s assume (and hope) that the Pfizer/BioNTech vaccine candidate is the global cure for COVID-19. Significant challenges remain including:
- Manufacturing the vaccine, en masse. Merck CEO Ken Frazier stated that a vaccine has never been used on 7.5 billion people before;
- Vaccine distribution, especially in countries where transportation, communication, electrical, and refrigeration infrastructure is not strong;
- Ultra-nationalism, where governments take what’s developed in their countries and vaccinate their citizens first;
- Vaccine affordability;
- A June 2020 survey of 13,426 people across 19 countries indicated that 71.5% of participants would be very or somewhat likely to take a COVID-19 vaccine, which could prolong the pandemic and continue to strain health systems due to the balance of participants likely declining the vaccine.
As well, the Pfizer press release states:
- Clinical trial to continue through to final analysis at 164 confirmed cases in order to collect further data and characterize the vaccine candidate’s performance against other study endpoints.
- Based on current projections we expect to produce globally up to 50 million vaccine doses in 2020 and up to 1.3 billion doses in 2021.
- Pfizer and BioNTech plan to submit data from the full Phase 3 trial for scientific peer-review publication.
So, even if peers validate Pfizer/BioNTech’s data after the clinical trial ends, it could take years before there are enough doses for every person in the world. Echoing this point, on November 9, 2020 President-elect Joe Biden lauded the news of Pfizer’s progress on a COVID-19 vaccine but urged Americans to be cautious because widespread vaccination is still months away. Biden said the news does not mean there is a cure, and he urged patience while setting expectations that the timetable for any potential vaccine had not changed. It could be well into 2021 before there is widespread vaccination.
Detection is the Bridge to the Cure and Controlling Case Loads For Therapies
We believe that until any effective vaccine can cure COVID-19 (as well other emergent viruses as and when surface, now that the world has awoken to this threat), virus detection and contact tracing is the best intermediary method to protect people and stem the spread. Kontrol Energy (CSE:KNR, OTCQB:KNRLF), a Sophic Capital client and an emerging leader in the Smart Buildings industry, has developed CSA standards approved technology called BioCloud® that detects COVID-19 in real-time and issues alerts. In basic terms, think of BioCloud as a smoke detector-like device that alerts to the presence of COVID-19 rather than fire. While Kontrol’s BioCloud cannot prevent infected people from passing the virus onto others, it can limit the number of people infected through early detection and can thus play a significant role in initiating early contact tracing. Compare this to an infected person testing positive for symptoms 3 weeks after contracting the virus, and then trying to trace everyone who was exposed to the infected person during those 3 weeks.
Coming Up: A Deeper Look at Kontrol’s BioCloud Solution, and Some Data Points Relevant to Investors
In our next report, we look at Kontrol’s BioCloud’s potential applications in multiple industries and some possible competitors. We also look at some data points pertaining to Kontrol’s business, which are of relevance to investors.
The information and recommendations made available through our emails, newsletters, website and press releases (collectively referred to as the “Material”) by Sophic Capital Inc. (“Sophic” or “Company”) is for informational purposes only and shall not be used or construed as an offer to sell or be used as a solicitation of an offer to buy any services or securities. In accessing or consuming the Materials, you hereby acknowledge that any reliance upon any Materials shall be at your sole risk. In particular, none of the information provided in our monthly newsletter and emails or any other Material should be viewed as an invite, and/or induce or encourage any person to make any kind of investment decision. The recommendations and information provided in our Material are not tailored to the needs of particular persons and may not be appropriate for you depending on your financial position or investment goals or needs. You should apply your own judgment in making any use of the information provided in the Company’s Material, especially as the basis for any investment decisions. Securities or other investments referred to in the Materials may not be suitable for you and you should not make any kind of investment decision in relation to them without first obtaining independent investment advice from a qualified and registered investment advisor. You further agree that neither Sophic, its, directors, officers, shareholders, employees, affiliates consultants, and/or clients will be liable for any losses or liabilities that may be occasioned as a result of the information provided in any of the Material. By accessing Sophic’s website and signing up to receive the Company’s monthly newsletter or any other Material, you accept and agree to be bound by and comply with the terms and conditions set out herein. If you do not accept and agree to the terms, you should not use the Company’s website or accept the terms and conditions associated to the newsletter signup. Sophic is not registered as an adviser or dealer under the securities legislation of any jurisdiction of Canada or elsewhere and provides Material on behalf of its clients pursuant to an exemption from the registration requirements that is available in respect of generic advice. In no event will Sophic be responsible or liable to you or any other party for any damages of any kind arising out of or relating to the use of, misuse of and/or inability to use the Company’s website or Material. The information is directed only at persons resident in Canada. The Company’s Material or the information provided in the Material shall not in any form constitute as an offer or solicitation to anyone in the United States of America or any jurisdiction where such offer or solicitation is not authorized or to any person to whom it is unlawful to make such a solicitation. If you choose to access Sophic’s website and/or have signed up to receive the Company’s monthly newsletter or any other Material, you acknowledge that the information in the Material is intended for use by persons resident in Canada only. Sophic is not an investment advisor nor does it maintain any registrations as such, and Material provided by Sophic shall not be used to make investment decisions. Information provided in the Company’s Material is often opinionated and should be considered for information purposes only. No stock exchange or securities regulatory authority anywhere has approved or disapproved of the information contained herein. There is no express or implied solicitation to buy or sell securities. Sophic and/or its principals and employees may have positions in the stocks mentioned in the Company’s Material and may trade in the stocks mentioned in the Material. Do not consider buying or selling any stock without conducting your own due diligence and/or without obtaining independent investment advice from a qualified and registered investment advisor. The Company has not independently verified any of the data from third party sources referred to in the Material, including information provided by Sophic clients that are the subject of the report, or ascertained the underlying assumptions relied upon by such sources. The Company does not assume any responsibility for the accuracy or completeness of this information or for any failure by any such other persons to disclose events which may have occurred or may affect the significance or accuracy of any such information.
The Material may contain forward looking information. Forward-looking statements are frequently, but not always, identified by words such as “expects,” “anticipates,” “believes,” “intends,” “estimates,” “potential,” “possible,” “projects,” “plans,” and similar expressions, or statements that events, conditions or results “will,” “may,” “could,” or “should” occur or be achieved or their negatives or other comparable words and include, without limitation, statements regarding, projected revenue, income or earnings or other results of operations, strategy, plans, objectives, goals and targets, plans to increase market share or with respect to anticipated performance compared to competitors, product development and adoption by potential customers. These statements relate to future events and future performance. Forward-looking statements are based on opinions and assumptions as of the date made, and are subject to a variety of risks and other factors that could cause actual events/results to differ materially from these forward looking statements. There can be no assurance that such expectations will prove to be correct; these statements are no guarantee of future performance and involve known and unknown risks, uncertainties and other factors. Sophic provides no assurance as to future results, performance, or achievements and no representations are made that actual results achieved will be as indicated in the forward looking information. Nothing herein can be assumed or predicted, and you are strongly encouraged to learn more and seek independent advice before relying on any information presented.