The coronavirus has shone a light on the biotechnology industry. But can biotech firms deal the decisive blow against the pandemic? 
Drawing on an impressive arsenal of new technologies and data, the biotech industry is in the frontline in the battle against the coronavirus. The ultimate blow against the virus would of course be a vaccine.
Perhaps the most promising avenue for research is mRNA (messenger RNA), in which the body is essentially used as the ‘bioreactor’ to produce the actual vaccine by giving cells the template (mRNA) to build the viral proteins against which an immune response is mounted.
While this is incredibly clever, it is also completely untested.
The first hurdle is to create an antibody response that is powerful enough. This is what is currently being examined in a phase 1 study, which alone will take one year. More traditional vaccines may be developed more quickly, but even these could take at least 12 months.
A faster, if smaller scale, solution could come from therapeutics. Several biotechnology companies are working on creating lab-grown antibodies against the coronavirus. Once developed, these could then be given prophylactically to those most at risk. They could even be used to treat patients with the disease. These antibodies are designed to be neutralisers – to stick to the surface of the virus like velcro and cover it so that it cannot bind to cells or enter the system.
An alternative to creating antibodies is to harvest them from the blood plasma of people who have recovered from the coronavirus – a practice that met with some success during the SARS epidemic.
Targeting the virus and its consequences
Concurrently, scientists are developing or adapting a range of drugs to fight the pandemic. The immediate priority is antivirals, which stop or slow the replication of the virus in the body.
One of the most advanced – in terms of development – is Gilead Science’s Remdesivir – an intravenous drug originally intended to combat ebola, but which is now being trialled in early treatment of the coronavirus, with clinical test results due this month.
Tackling some of the more serious complications that occur during the later stages of the virus infection is another area of research.
If the disease is not caught early, or effectively fought off, the immune system can go into overdrive and start attacking the body. Suppressing this immune overreaction – by blocking the so-called IL-6 receptor – is the focus of drugs for treatment of the later stages of the disease, such as Regeneron Pharmaceuticals’ Kevzara.
Risks and opportunities
All this is not to say the biotech industry can work at full capacity. It too is affected by efforts aimed at containing the pandemic.
Conducting human clinical trials is much harder due to lockdowns, so many of these have been delayed. The commercialisation of new drugs has also slowed, as traditional face-to-face marketing is no longer possible.
Production, meanwhile, is affected by the shuttering of factories and shortages of raw materials – some of the major manufacturing sites for ibuprofen, for example, are located in China’s Hubei province and Italy’s Lombardy region. Furthermore, the strain in financial markets will make it harder to raise new capital, which is particularly pertinent for younger, less established biotech companies.
Finally, even though coronavirus treatments will capture headlines and boost sentiment, the companies involved will feel obliged to keep pricing as low as possible, so they – rightly – will not be blockbusters for corporate profits.
As an investment, the biotech industry can be volatile – drugs can succeed or fail, patents can be granted or lost. However, the sector has historically held up well during times of market turbulence and recession (including during the global financial crisis in 2008-9). That’s because demand for medicine is not driven by economic cycles.
Lydia Haueter is senior investment manager on the Pictet Health fund. The views expressed above are her own and should not be taken as investment advice.