In biotech, every threat to human health is a potentially lucrative opportunity to develop an effective treatment. As such, long COVID -- the poorly defined constellation of persistent symptoms that follows some people's acute bouts with the virus -- could soon become one of the pharmaceutical industry's most popular targets. Several companies are already in search of effective treatments for the condition, and more are likely to join the pursuit.
But why is long COVID such an appealing target for biotech? Which competitors are leading in the space right now, and which, if any, might be good investments for you?
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The market could be massive
More than 700 million people worldwide have had confirmed coronavirus infections so far. While most people fully recover after those illnesses, between 10% and 20% of them develop long COVID. It is estimated that more than 65 million people are still affected by the condition globally. Per the consensus of the World Health Organization, long COVID is characterized by a veritable rogue's gallery of symptoms such as fatigue, shortness of breath, chest pain, joint pain, and an array of cognitive dysfunctions, all of which detrimentally impact people's daily lives.
It's presently unclear whether people are at a higher or lower risk of developing the disease if they're infected with COVID multiple times. And despite the protective effects of vaccines, even vaccinated individuals are still at risk of persistent post-viral symptoms. Many people who suffer from long COVID can't maintain stable employment due to the symptoms, and right now, there are no therapies or cures that are known to be effective at treating its root causes, which are still under scientific investigation.
The illness has so many symptoms -- and so many plausible potential causes for them -- that drug developers have quite a few different potential angles to explore for treating it. That's the first reason why the market for long COVID medicines could eventually be gargantuan. For example, if one pharmaceutical company succeeds in making a therapy that addresses the fatigue associated with the condition, it wouldn't be directly competing with another biotech selling a therapy that addresses shortness of breath or cognitive problems. So there's little reason for companies, large or small, to refrain from taking a crack at long COVID, as there's little chance of a competitor eating their lunch, nor are there any established market leaders.
Plus, until the risk factors are known with more certainty, especially pertaining to the risks associated with repeat infections, it is reasonable to assume that demand for long COVID treatments will increase over time as the coronavirus continues to circulate globally.
What companies are eyeing the market?
In part, because so much about long COVID is still unclear, few drugmakers have seen much success with candidates to treat it. There's no specific biotech anyone can point to and say that it's guaranteed to have luck in treating the condition. But a couple of them could make some headway relatively soon.
Argenx (ARGX 1.14%) is developing a medicine to treat post-COVID postural orthostatic tachycardia syndrome (POTS), a condition in which people's hearts race excessively when they stand up or change positions. Its candidate is currently in phase 2 trials, so under the best-case scenario, it would be at least a couple of years before it makes it to the market. There's also a soon-to-start phase 3 trial investigating whether Pfizer's antiviral Paxlovid can effectively treat the symptoms of long COVID. As Paxlovid is already approved as a therapy for acute COVID-19 infections, its road to commercialization for long COVID could be much shorter.
But others have already struck out. For example, roughly a year ago, PureTech Health ran a phase 2 trial on its candidate to treat the inflammation and lung fibrosis associated long COVID. The study found that the company's candidate had no impact. It's reasonable to expect that some of the other ongoing attempts to develop treatments will strike out too.
So what should investors do? Buying shares in Argenx or Pfizer isn't a terrible move, as both are well-established businesses that have plenty of other avenues for growth outside of long COVID therapies. But the biggest gains are likely to go to investors in early-stage biotechs working on big solutions -- assuming one is lucky enough to choose the right ones.
Be on the lookout for smaller companies pursuing indications for the most common symptoms associated with long COVID. It's going to be risky to invest in a business that's attempting to compete in a totally new market no matter what, so it might make sense to invest in more than one of them to increase your odds of picking a winner. Beyond diversifying biotech investments here, investors should ensure they have some stable stocks in other industries to balance their portfolios.
