Healthcare update Part One: Recent developments in Covid-19 treatments

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Dr Jenna Denyes, Senior Healthcare Analyst, discusses the most recent developments in Covid-19 treatments, in particular the likely availability of medication in pill form and the implications for healthcare systems, as well as how pharmaceutical companies were able to develop treatments at such a pace.

10 December 2021

What are the most recent developments in Covid-19 treatments?

Friday [12 November] was sort of a big news day for Covid antibodies in general. So the European medical body released a positive opinion for two antibodies, which is great, one from Roche and one from a smaller company from Hungary. So these are medications you can use to reduce hospitalisation or death. They worked really great. And so that was great news in Europe on Friday. Also on Friday in the US news came out from Vir Biotech with their partner, GSK, that one of their antibody treatments, which is intravenous (IV), they've actually been able to adapt it to be an intra-muscular injection instead. So this kind of an adaptation, it's not actually as straightforward as it sounds, but it means it can reduce the burden on the healthcare system by allowing the injection to be given by a caregiver or even the patient instead of having to be delivered in the hospital.

What about medication in pill form?

I think everyone's heard the news by now about the Pfizer pill and the pill which came out over the past few weeks, which is great news. So these are both small molecules which are antivirals. They can be used to reduce the risk of hospitalisation or death. They were typically tested in high risk patients. This doesn't mean they don't work in low risk patients. But when you're running a clinical trial, you want to maximise your chance of events. So you want to make sure you see what the drug is really doing. So that's why they prefer to test in high risk patients. But these are oral medications, which, it's great. You go to the pharmacy and pick up your prescription, bring it home the same as any other pill. The positive results from these oral medications are really promising to start reducing the healthcare burden is we need to keep as many people out of the healthcare system as possible. There are a handful of very effective vaccines available. They work really well at reducing the severity of infection, but they don't prevent infection entirely. So if we have another option to reduce the number of patients who are going into the ICU or into the hospitals, this should be another big step forward towards normalisation of the pandemic situation. These types of medications are definitely going to be prescription. Only an antiviral medication is not. It's not a light medication. It's not like you take a Tylenol for a headache. It's not even like taking antibiotics for bacterial infection. The Merck drug molnupiravir does come with some risks for developing foetuses. It would not be indicated for pregnant women. It sounds kind of scary and extreme when you hear that, but actually, there's a number of medications already approved in the same drug class, one of the more common being acyclovir, which is used to treat herpes. So it sounds a bit scary at first, but this is just how you have to go in and attack these virus replication systems. The Pfizer medication doesn't have the same safety risk, but it comes with a bit of a different complication. So we have an enzyme in our liver that really likes to degrade medications like the Pfizer drug. So they've developed it to be administered, together with ritonavir, a common medication used exactly for this purpose so it will inhibit the enzyme in the liver that would degrade the Pfizer medication again. That sounds a bit complicated and strange, but this is quite common for viral treatments like for HIV, for example. The thing is, this enzyme is really important for metabolising a lot of medications, not just an antiviral medications. So if you're taking something for cholesterol or blood pressure, your pharmacist is going to need to take a look at that and make sure they adjust your medication with the administration. So both the Merck drug and the Pfizer drug come with some considerations, which will mean it will be important for them to be prescribed appropriately.

How equitable will the global distribution of such treatments be?

It's a bit interesting to look at how the global distribution of vaccines and treatments plays out. There's a lot of different factors which come into it, some of which are controllable and some of which aren't. Some of the good news about the oral treatments from Pfizer and Merck is that they're pills, which means they're easy to distribute. They do not need cold chain storage, and they don't require a medical professional for administration. If you're giving someone an IV infusion for antibodies, that's not something you can do at home so as effective as the antibody treatments have been, they have been restricted to hospital settings and to more developed countries. Hopefully with approval in the respective countries of the small molecule oral treatments, we could see a more equitable distribution of the Covid treatments. Also, since the spring, we have started to see a greater use of the Covax programme and a greater distribution and or shall we say, redistribution of some of the Covid vaccine doses from developed countries into developing markets. As of today, we've administered about 7.5 billion vaccine doses, which is pretty astronomical when you think about it. But we haven't quite reached everyone yet, so hopefully we'll continue to distribute the vaccines on a more global scale. This global distribution is important for a lot of reasons. We all talk about the Delta area and the Delta variant and its cousins, and it's an experience they're going to keep happening when we have populations that are unvaccinated wherever they are in the world. That spread is going to reach all of us. So if we can protect everyone near and far, that protection also helps us close to home, too.

Was the pace of development of treatments surprising?

So with the with the Covid 19 vaccines, there was a really bright spotlight shone on the whole drug development process, and we got to see what happens when everything sort of works. So there's a number of steps that have to happen before you can develop a drug and, you know, Moderna and Pfizer BioNTech. We're very lucky in that all of their steps were successful. They weren't the only mRNA technology to be applied to vaccines, and they weren't the only ones that succeeded. But not everyone succeeded. But what we saw with the Corona vaccine development was that companies were taking a lot more risks with money, but not with patients. So normally they would have to do one step at a time to make sure their investment was worthwhile and to make sure they weren't bringing ahead the wrong drug candidates that weren't going to be successful. I think Pfizer and BioNTech brought four, five or even six phase two candidates to trial. That's a lot of money. It's a lot more expensive and so a lot of the slower timelines that we see with other products aren't necessarily a result of manufacturing or regulatory delays, but they're just companies looking to maximise the return on their investment. So we've learned that if you have enough money and enough patients who are willing to enrol in clinical trials, things can move ahead pretty quickly. It's also important to understand that the mRNA Technologies themselves allow for much more rapid development than any of the other vaccine technologies we've used before. I mean, I think they had, sure I'll get the number wrong, but they had the sequence for the mMRA vaccine hours after receiving the SARS CoV-2 genome sequence. That's just not something we could do five or 10 years ago. So the advances in computing power, in big data processing, genomics sequencing all of these different technological advances have come together to help us make this vaccine so much more quickly than before. I think it's highlighted a few channels that drug developers could use to move ahead more quickly. But unless we continue to see an influx of capital, I think ultimately they're not going to be able to sustain the case of risking the large capital investment by moving ahead so many candidates at once.

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The information in this document is given for information purposes only and does not qualify as investment advice. Opinions and assessments contained in this document may change and reflect the point of view of GAM in the current economic environment. No liability shall be accepted for the accuracy and completeness of the information. Past performance is not an indicator of current or future trends. The mentioned financial instruments are provided for illustrative purposes only and shall not be considered as a direct offering, investment recommendation or investment advice. The securities listed were selected from the universe of securities covered by the portfolio managers to assist the reader in better understanding the themes presented. The securities included are not necessarily held by any portfolio or represent any recommendations by the portfolio managers.

Dr Jenna Denyes

Healthcare Analyst
My Insights

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