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3 Things to Know if Chloroquine Wins the COVID-19 Treatment Race

By Adria Cimino - Mar 27, 2020 at 5:45AM

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An old malaria drug may unseat newer investigational coronavirus treatments -- if data is confirmed.

The coronavirus pandemic has so far resulted in the shutdown of economies around the globe and driven stocks into a bear market. Biotech and pharmaceutical companies are racing to develop treatments and prevention for COVID-19, the illness caused by the new coronavirus. And at the same time, a simple malaria drug known as chloroquine and a small study out of a Marseille, France research center are making headlines -- and creating controversy.

Pills and an injection for coronavirus against a blue background.

Image source: Getty Images.

Here are three things to know if chloroquine wins the treatment race.

We still need other treatments

First, some background on the study that has stirred up interest. The trial was led by infectious disease specialist Didier Raoult, an eminent figure in his field. Raoult and his team tested hydroxychloroquine -- a chloroquine equivalent that has a better safety profile -- originally on 26 patients. Six were out after the first few days for the following reasons: Three patients were transferred to intensive care, one died, one decided to leave the hospital, and the sixth lost patient stopped the treatment midway through the trial due to nausea. So the final study included 20 subjects in the treatment group and 16 in the control group.  Of the 14 patients given hydroxychloroquine only, eight were cured by the sixth day of the study. Of the six patients given hydroxychloroquine combined with the antibiotic azithromycin, all were cured by day six. In the control group, which didn't receive the treatments, only two patients were clear of COVID-19 by that time.

Though some say the medical community should wait for more data before using the drug, others are flocking to the treatment. France authorized use of the molecule for serious forms of COVID-19 at the discretion of doctors. Though the drug has been used on COVID-19 patients in the U.S., the U.S. Food and Drug Administration hasn't approved it for this indication.

In cases of malaria, chloroquine works by killing malaria parasites in red blood cells. The idea of using chloroquine to treat COVID-19 actually began with research on the drug as a possible way to halt the spread of severe acute respiratory syndrome (SARS). That research found chloroquine disrupts the virus's ability to replicate. More recently, a research team in China studied hydroxychloroquine in primate cells and confirmed that finding. Chloroquine lifts the pH level of an acidic part of the cell membrane, making it more basic, hurting the virus's ability to enter and replicate. The drug also appears to stop the virus from connecting with a receptor that allows it to infect.

Even if additional trials confirm the French study's results and the FDA approves chloroquine for COVID-19, prevention and other treatments are needed. For various reasons, some patients may not respond to the molecule, while others might not tolerate it. Different drugs might be more suitable for these patients. The rapid transmission and devastating outcomes of COVID-19 -- cases globally have reached more than 466,000 and deaths have surpassed 21,000 -- mean prevention also remains important.

President Donald Trump touted the drug's benefits, saying he would make it "available almost immediately." Trump's statement about the treatment led an Arizona couple to self-medicate, taking chloroquine phosphate used for cleaning fish tanks, which isn't the same as the drug chloroquine. The man died and his wife remained in a critical care unit. There have been other instances of people overdosing on the actual drug, a reason healthcare professionals have emphasized the importance of speaking to doctors and refraining from taking medications without professional advice. 

Shares of others in the race may lose momentum

Companies working on COVID-19 treatment and prevention have seen their shares soar so far this year. Moderna (MRNA -5.06%) gained 44%, Regeneron Pharmaceuticals (REGN -1.81%) rose 15%, Gilead Sciences (GILD -1.27%) climbed 9%, and Inovio Pharmaceuticals (INO -0.79%) soared 102%.


Image Source: YCharts

These stocks may lose momentum if chloroquine becomes the "go-to" drug for COVID-19. As mentioned above, there is room for additional treatments, but if chloroquine gets the first-mover advantage, others that eventually enter probably will seize a smaller share of the market than hoped. The news also would burst the bubble of excitement about finding the cure or prevention for an untreatable illness. That element has lifted some of the smaller biotech companies that don't yet have products on the market -- Moderna, for example -- because an approval for COVID-19 would show their technology works in humans.

So, you might wonder, if chloroquine becomes the drug to treat COVID-19, which drugmakers will benefit? Probably none. Here's why: Chloroquine is an old drug, first approved in the 1940s for malaria, and today, there are many drugmakers that produce it or hydroxychloroquine -- too many to make it a best-seller for any one company.

French drugmaker Sanofi (SNY -2.35%) -- which is also in the race to find a COVID-19 treatment -- makes hydroxychloroquine under the name Plaquenil. Sandoz, a division of Novartis (NVS -0.35%) that focuses on generics and biosimilars, and generic drugmaker Mylan (MYL) also produce the drug. And that's just to name a few.

The stock market may breathe a sigh of relief

Although it's impossible to predict when the market will rebound, we do know the trouble started with the coronavirus outbreak. As the health crisis worsened, shutting businesses and quarantining workers and consumers, investors' worries deepened about the effect on companies' supply chains and sales globally. Without a treatment for the virus or a way to stop its progress, investors were left in the dark regarding the future health of their investments.

Since doctors are using chloroquine or hydroxychloroquine on COVID-19 patients, we may soon know more about its efficacy. If chloroquine wins the treatment race, the stock market won't rebound overnight -- earnings reports with effects from the crisis are still to come. But a win by chloroquine could be the inflection point we all have been waiting for to stem the bleeding.

Adria Cimino has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Gilead Sciences. The Motley Fool recommends Mylan. The Motley Fool has a disclosure policy.

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Stocks Mentioned

Sanofi Stock Quote
$41.19 (-2.35%) $0.99
Novartis AG Stock Quote
Novartis AG
$84.92 (-0.35%) $0.30
Regeneron Pharmaceuticals, Inc. Stock Quote
Regeneron Pharmaceuticals, Inc.
$624.83 (-1.81%) $-11.51
Gilead Sciences, Inc. Stock Quote
Gilead Sciences, Inc.
$65.18 (-1.27%) $0.84
Viatris Inc. Stock Quote
Viatris Inc.
Inovio Pharmaceuticals, Inc. Stock Quote
Inovio Pharmaceuticals, Inc.
$2.51 (-0.79%) $0.02
Moderna, Inc. Stock Quote
Moderna, Inc.
$150.00 (-5.06%) $-8.00

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