New twists and turns continue to come in the scramble to develop a COVID-19 vaccine.
Last week, Moderna (NASDAQ:MRNA) reported more great results from a phase 1 study of its vaccine candidate mRNA-1273. This week, medical journal The Lancet published positive results for AZD1222, the COVID-19 vaccine candidate being developed by AstraZeneca (NYSE:AZN) and the University of Oxford. Pfizer (NYSE:PFE) and BioNTech (NASDAQ:BNTX) also announced more good news for experimental coronavirus vaccine BNT162b1.
There have also been two recent findings that potentially impact all of the drugmakers developing vaccines against SARS-CoV-2. Could these findings dramatically change the prospects for COVID-19 vaccine stocks?
Earlier this month, science journal Cell published a paper that laid out evidence that a mutation of the novel coronavirus called D614G makes the virus more infectious. This mutation seems to have occurred relatively soon after SARS-CoV-2 first appeared in Wuhan, China. But it's now present in as many as 97% of COVID-19 tests.
Why could mutations be problematic for COVID-19 vaccines? Just think about how current flu vaccines work. Every year, healthcare experts try to predict which flu strains will be most prevalent. There are different strains because of genetic mutations in the viruses that cause influenza. The flu vaccines that are given for that season target those strains. But the experts aren't always right. That's why sometimes people receive a flu vaccine but still get the flu.
There's good news and bad news when it comes to mutations in the novel coronavirus. First the good news: The D614G mutation shouldn't affect COVID-19 vaccine candidates in development. This mutation occurs in a different region of the spike protein than the one on which most of the experimental vaccines are based.
What's the bad news? Future mutations to SARS-CoV-2 could potentially make the vaccines being developed by AstraZeneca, Moderna, and others less effective. Infectious-disease expert Dr. Aileen Marty, of Florida International University, has warned that other mutations could slow the development of an effective COVID-19 vaccine. It's also possible that vaccines could be rendered less effective after they're in widespread use.
Several studies over the last couple of months have suggested that patients who recover from COVID-19 quickly lose their neutralizing antibodies that protect against the novel coronavirus. Last week, King's College London released results from the most comprehensive research on this effect so far. And those results raised some concerns.
Neutralizing antibodies are typically produced in patients diagnosed with COVID-19, and reach peak levels after a few weeks. However, the levels of neutralizing antibodies then begin to decline, sometimes significantly.
Patients with SARS and MERS, two other members of the coronavirus family, can still have neutralizing antibodies almost a year later. But the coronavirus that causes COVID-19 appears to be quite different; neutralizing antibodies can practically vanish within a much shorter period of time.
The obvious issue is that immunity for patients who recover from COVID-19 might not last longer than a few months. This isn't a foregone conclusion, though.
With some infectious diseases such as smallpox, antibody levels can fall significantly, yet people who've recovered still enjoy immunity. A similar effect could be seen with SARS-CoV-2. It's also possible that immune cells called memory T cells could be just as important to providing immunity against the novel coronavirus as neutralizing antibodies. The King's College London study didn't assess T-cell levels in patients.
The market dynamics for COVID-19 vaccines (and the stocks of the companies that make them) could be changed by both of these findings. For example, genetic mutations that make the novel coronavirus more infectious or more severe would almost certainly drive higher demand for COVID-19 vaccines. Individuals who might be reluctant to receive a vaccine could change their minds if the pandemic worsens.
But what if genetic mutations occur that cause COVID-19 vaccines to be ineffective? Drugmakers like AstraZeneca, Moderna, and Pfizer could be engaged in a continual race to develop modified vaccines to keep up with the new viral strains. And demand wouldn't be nearly as high for vaccines that have a high probability of not working.
Perhaps a greater impact for COVID-19 vaccine companies, though, could be experienced if immunity lasts for only a few months after vaccination. It's possible that this could boost sales for the drugmakers, since more vaccine doses would be needed each year. On the other hand, it's also not out of the question that many individuals would forgo a short-acting vaccine altogether.
Regardless of what happens, any of the drugmakers that ultimately win regulatory approval for their respective COVID-19 vaccine candidates should capture part of a massive multibillion-dollar market. But just how big that market will actually be depends on the twists and turns that could be on the way.