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Ahead of the curve: Where is the vaccine research or when can we end the lock-down?

November 17, 2020

A commentary by Jürgen Lukasser, Chief Investment Officer of LGT Bank Austria, on current vaccine research as well as possible medications in the various stages of development. 

Ahead of the curve: Where is the vaccine research or when can we end the lock-down?

Today is the day. In Austria, the second tough lock-down begins as escalating infection rates threaten to push intensive care facilities to their capacity limits. A three-week curfew is a depressing prospect. It is therefore a good time to get an overview of the potential weapons in the fight against the pandemic. The main focus is on possible vaccines to confer immunity, but also antiviral drugs to ensure effective treatment of infections. At this point, the focus today will be on possible vaccines.

Vaccines pursue the goal of giving broad sections of the population a sufficient level of immunity. Vaccines are therefore considered to be the decisive instrument to defeat the pandemic. Due to the very high requirements on the safety of these preparations, extensive test studies are absolutely necessary. This results in comparatively long development times. In total, the WHO assumes that there are currently around 180 potential vaccine candidates in different development phases. From a current perspective, the following preparations appear to have the best chances of being successfully rolled out:

  1. BNT162b (developed by BioNTech, Pfizer and ShanghaiFosun)

BNT162b is a messenger RNA vaccine developed by the German company BioNTech together with the U.S. pharmaceutical giants Pfizer. A few days ago, BioNTech and Pfizer announced that a study involving several tens of thousands of volunteers was expected to achieve an efficacy of around 90%. The efficiency of 90% clearly surprised on the positive side. This information immediately caused a fireworks display on the international stock exchanges. In principle, the vaccine is in Phase 3 and thus in the final stage of the approval procedure. The high efficacy opens up the possibility of an emergency approval by the U.S. authorities, if further investigations can also meet the safety requirements. The companies estimate that a total of around 1.3 billion doses can be produced by the end of 2021. 

  1. mRNA-1273 (developed by Moderna)

A preliminary study with about 30,000 volunteers showed an effectiveness of 95% according to information from the company, which was published today. The company has been conducting safety follow-up studies for two months. It is assumed that an emergency approval could be granted on the basis of a final investigation of 151 significant cases. In recent months, the U.S. government has supported this program with approximately USD 1 billion. At the same time, the United States has secured the supply of 100 million doses equivalent to USD 1.5 billion.   

  1. chAdOx1nCoV-19 (developed by Oxford University and AstraZeneca) 

This vaccine is made from a harmless virus that has been modified to produce the surface protein of SARS-Cov-2. The compound is also in Phase 3 of the approval process. A US study had to be paused after the disease of a volunteer was detected in a separate study in the UK. In the meantime, the tests in the US study and in the British study could be resumed. 

  1. JNJ-78436735 (developed by Johnson & Johnson)

Johnson & Johnson is working on an adenovirus-based vaccine. The preparation is currently in the phase of the approval procedure. Due to potential side effects of the adenovirus-based vaccine, the test series had to be suspended, but has since been resumed after the cases were clarified. The ongoing study with 60,000 volunteers is the first large U.S. study of a vaccine that could be effective after only one dose.

  1. unknown compound (developed by ChinaNationalBiotech and Sinopharm)

This compound was generated from inactivated versions of the virus and is believed to enable the human organism to produce antibodies without risking infection. The vaccine is also in Phase 3 of the approval process. The vaccine is produced by the two above-mentioned governmental vaccine manufacturers and was used under an emergency license in Wuhan as part of the containment of the pandemic in approximately 100,000 people, including emergency medical personnel. The vaccine is currently undergoing final testing in the Middle East and South America. Manufacturers expect the product to be available in China by the end of 2020.

  1. CoronaVac (developed by Sinovac Biotech)

This vaccine is also derived from inactivated versions of the Corona virus and is currently in Phase 3 of the approval process. Due to potential cases of serious side effects, the study had to be suspended in Brazil, but could be resumed after a relatively short period of time. The vaccine is already approved for emergency use by medical personnel, customs officials, etc. in China.

  1. Sputnik V (developed by Gamaleya Research Institute)

This preparation is a viral vector vaccine based on a harmless cold virus fused with the surface protein of SARS CoV-2. According to Russian data, the vaccine is 92% effective in preventing disease. The preparation is in Phase 3 of the approval process, the findings are based on the results of a study with 20,000 volunteers who received one dose and 16,000 people who were also given a second dose.

  1. Ad5-nCoV (developing CanSino Biologics)

This vaccine cleaves the top protein of the corona virus into a non-replicating variant of an adenovirus. CanSion is working with the Chinese People's Liberation Army in the testing campaign. Currently, Phase 3 trials are being conducted in Russia, Pakistan and other countries on approximately 40,000 volunteers. The vaccine already has a special approval in China for military use.

What is the bottom line? Even if the current lock-down "really sucks" - to quote Interior Minister Nehammer - there is certainly justified hope from the developments described above. In this context, it seems essential that there are several different procedures and methods for starting the fight against the pandemic through vaccines. Through the eyes of the asset manager, this represents a form of risk diversification that provides comfort in uncertain times. There is therefore a realistic chance of a return to normality in the coming months. This is not only a comforting thought in the lock-down, but offers decisive potential from an economic point of view and may ultimately bring interesting investment opportunities on the stock markets.

Note: The raw data is based on an article by Bloomberg.

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