A small team of 10 researchers began designing vaccine candidates shortly after the genetic sequence of the SARS-CoV-2 virus was made public last January. For the past decade, the team had worked on vaccines for the Zika virus and Ebola, as well as another coronavirus, MERS. They knew others working on a COVID vaccine would beat them to market, but they had their sights set on a bigger prize.
This week, that team injected its vaccine candidate into the first human. If it works, it could throw the sales estimates for Moderna (NASDAQ:MRNA), Pfizer (NYSE:PFE), and others up in the air. It seems while the well-known biotech and blue chip drugmaker were winning the battle against the novel coronavirus, this unsung group was trying to end the war.
One jab to rule them all
The first efforts of the Walter Reed Army Institute of Research (WRAIR) can be traced back to 1893. The group works with both military and civilian professionals to develop products for both existing and potential threats. The organization's infectious disease branch was the one that took on the COVID challenge 15 months ago.
The team's goal was to develop a drug that would inoculate recipients against all coronaviruses. To do it, they would have to come up with a different approach. The currently authorized vaccines feed instructions to the cells so they can make the famed spike protein of the SARS-CoV-2 virus. When the body sees it and recognizes it as foreign, it develops antibodies to fight it if it ever returns.
Rather than provide instructions, the WRAIR vaccine presents both a nanoparticle with 24 spike proteins and an adjuvant, an ingredient that helps boost the immune response. What is injected actually looks like a virus, not just part of one. That helps the body recognize more than just one distinctive marker. The result is a more robust immune response to any SARS virus, even the variants now circulating around the globe.
Put simply, the group believes it is on the path to a vaccine that could protect against all SARS coronaviruses. So far, tests in thousands of mice and dozens of monkeys have shown the drug to be effective against variants of the current virus, as well as other coronaviruses like SARS-1. Even better, the Army's development process prioritized practicality, so the vaccine doesn't need any special handling. It's stable enough to be tossed in a cooler on the back of a motorbike and driven to whatever remote location needs it.
Banking on a booster
Moderna, Pfizer, and Johnson & Johnson (NYSE:JNJ) are all expected to make billions this year as COVID-19 vaccines are distributed. The guaranteed government contracts they signed were a major reason they made the investments required to get a vaccine in less than a year. While Johnson & Johnson is expecting about $8.5 billion more in total revenue this year, Moderna and Pfizer expect $18.4 billion and $15 billion in COVID-19 vaccine sales, respectively.
Analysts predict that continued spread and mutations will keep demand high for the jabs. Some estimates show the market tapering off from $75 billion this year to $23 billion next year, gradually reaching about $6 billion in 2025. That's an enormous financial opportunity that would be in serious doubt if the U.S. government developed an all-encompassing vaccine of its own.
The U.S. government poured more than $10 billion into vaccine development as the pandemic took hold last year. That funding was just the latest contribution stretching back decades. Federally funded work that originated at Vanderbilt University and was continued at the National Institutes of Health (NIH) and the Department of Defense led to the viral protein design used by Moderna and Pfizer. Related research published in 2013 and 2016 set the stage for creating the vaccine. In fact, Moderna's COVID vaccine came directly from a partnership with the same NIH mentioned above. Modifying RNA, the other trick that made these vaccines possible, was the work of an unheralded researcher at the University of Pennsylvania, Katalin Karikó. She submitted her first grant proposal in 1989.
That's not to say the companies don't deserve credit -- and economic benefit -- from creating the existing vaccines. They do. It does make it less surprising that a small government group may have created a vaccine to end the war with coronaviruses once and for all. If it works, it's hard to say who would benefit from the manufacture and distribution of a pan-SARS vaccine. Analyst estimates for years of vaccine profits would almost certainly get slashed, as would the stock price of any company presuming the bounty.
One benefit of government-led research would be the absence of misleading press releases, massive stock sales, special options grants, and retroactive bonus plans like the ones that were so hotly debated last year. Instead, the drug would simply be the fruit of funding basic biological research year after year. We could think of it like a dividend we would all get paid as stakeholders of this country.