You don't have to look far to see just how big of an impact the Ebola scare had on the world last year. Just grab a copy of TIME magazine, which anointed the Ebola fighters as its "Person of the Year" if you need proof. Or, even better, examine the Ebola incidence statistics from the World Health Organization, which as of August had labeled 27,948 cases as confirmed, probable, or suspected, of which 11,283 people died -- a horrifying 40% mortality rate.
Ebola isn't a terrifying disease solely because of its high mortality rate, but also because of its lengthy incubation period of two to 21 days. With symptoms sometimes not apparent until weeks after exposure, the chance to suppress a global outbreak of the disease is limited. Amazingly enough, though, global health workers did an incredible job containing the disease largely within three African countries (Sierra Leone, Guinea, and Liberia).
Did these drug developers just cure Ebola?
All the while, more than a half-dozen drug developers have been hard at work developing what they believe could be the end-all cure for Ebola. But just like any drug, vaccines must go through the arduous safety and efficacy process the Food and Drug Administration lays out, meaning after more than a year not a single clinical study has officially met its primary endpoint of eradicating the disease in a late-stage study.
However, an interim analysis from Merck (NYSE:MRK) published recently in The Lancet demonstrates that a cure could be just around the corner.
Merck and its development partner NewLink Genetics (NASDAQ:NLNK) are currently examining the rVSV-ZEBOV vaccine in a phase 3 study in West Africa in a trial sponsored by the World Health Organization. The trial involves 7,651 patients split into two groups. The first group was inoculated with the vaccine immediately when their village was exposed to the Ebola virus. The second group was also inoculated, but after a delay. An interim analysis of the phase 3 study demonstrated that the group receiving the immediate inoculation had zero instances of Ebola virus infection after 10 days, whereas the delayed group had 16 instances of infection. Not only was the difference deemed statistically significant, but it represents a vaccine effectiveness of 100%!
Moreover, while rVSV-ZEBOV's safety is still being analyzed by WHO, the vaccine generally looks to be quite safe and well-tolerated. Only 43 adverse events have been noted through the interim analysis out of more than 7,600 patients.
Merck's results were also a breath of fresh air for Ebola sufferers and concerned citizens worldwide, as prior Ebola studies had not necessarily been kind to vaccine developers.
In June, Arbutus Biopharma (formerly known as Tekmira) announced that its midstage Ebola vaccine, TKM-Ebola-Guinea, an RNAi-based vaccine designed to stop the disease from replicating inside the body, wasn't demonstrating a therapeutic benefit. The trial was halted and no further patients were enrolled, with Arbutus eventually shelving TKM-Ebola about a month later.
Cheer for a cure, not for the profits
Keep in mind that Merck's published findings were only an interim analysis of its results, and that they could change by the end of the study. Nonetheless, a 100% cure rate in the interim analysis is incredibly encouraging and signals that a cure may very well be in sight.
However, for investors who bid up Ebola vaccine developers in 2014, there may not be much financial reason to cheer. Even if Merck and NewLink are successful in bringing rVSV-ZEBOV to market, it may not wind up making either company a profit (aside from the $50 million NewLink received upfront from Merck for worldwide rights to the vaccine). The reason is that vaccines are wholly dependent on outbreaks and government stockpiling demands. Out of the gate there could be strong initial demand for the vaccine, especially in select developed nations and the worst-affected African countries. Beyond an initial stockpiling, though, sales of rVSV-ZEBOV could dry up, or at best be incredibly lumpy.
But the way Merck sees it, that's not necessarily a bad thing. Mark Feinberg, the VP of Merck's Vaccine division, had this to say in an interview with CNBC just a few weeks prior:
"Our motivation to pursue this opportunity was to address a public health need. We did not believe this was a commercial opportunity. When the Ebola outbreak severity was more widely recognized, we undertook a very active effort to try to identity what are the ways our experience and expertise could potentially help."
Sometimes you just have to cheer the cure and not the profit (or lack thereof) that could ensue from it.