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Summary

  • Healthcare and pharma companies across the globe are burning their midnight oil to find a safe and effective vaccine against the coronavirus.
  • While AstraZeneca is leading the race in terms of COVID-19 vaccine development, Moderna is not far behind.
  • WHO does not see any silver bullet at the moment to defeat coronavirus pandemic.
  • Australian TGA has lately awarded provisional approval for the use of Gilead Sciences’ remdesivir to treat Covid-19 patients.
  • The latest study by McKinsey noted that the enhanced treatments for coronavirus are likely to be available by the end of 2020.
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The continuing surge in COVID-19 cases has made the availability of a vaccine or treatment the need of the hour. Consequently, healthcare /pharma companies across the globe are burning their midnight oil to find a safe and effective vaccine.

As per the draft landscape provided by the World Health Organization on 31st July 2020, 165 investigational vaccines are being assessed across several platforms. Out of these candidates, twenty-six are under clinical evaluation, while others are under pre-clinical evaluation.

In addition to the companies seeking COVID-19 vaccine or treatment, those supplying medical equipment, masks, santisers, ICU support care, ventilators have also gained immense popularity over recent months.

Read Your Complete Guide: Companies Hitting the COVID-19 Vaccine Charter – Part 1, Part 2 and Part 3

Emerging Trends from Equity Market Perspective

Backed by buoyant demand, the healthcare sector has been quite quick in recovering from an initial pullback witnessed in equity space in March 2020, as evident from the following returns of healthcare indices:

Source: Kalkine Image

While healthcare industry has stayed relatively resilient from the coronavirus repercussions, there is enormous uncertainty over potential performance of the sector with second wave of infections emerging in various countries and no specific vaccine or treatment available till date. Market players need to stay cautious of the potential risks while taking exposure to currently booming healthcare space.

Also Read: Is Healthcare Rally Coming to an End? A needle on CSL, RMD, CUV

Prominent Healthcare Players in the Vanguard

With COVID-19 vaccine race proceeding at war time speed across the globe, some prominent healthcare players have stayed in the vanguard, particularly those in the late stage clinical trials.

AstraZeneca: The Company’s experimental COVID-19 vaccine (AZD1222), developed by Oxford University’s Jenner Institute, is in late-stage Phase III trials, and is anticipated to enter human trials soon. The late-stage trials are underway in Brazil and South Africa and are due to start in the USA, where incidence of the infection is higher.

AZD1222 lately produced concrete results from trials involving 1,077 people, which showed the injection led them to making antibodies and T-cells that can fight coronavirus.

Moderna Inc.: The Company’s developed vaccine prototype, mRNA-1273 is also one of the prime contenders in the list, which has recently entered phase III clinical trials in Bahrain.

Sinopharm: China-based pharmaceutical company Sinopharm has recently initiated a Phase III clinical trial to assess its Covid-19 vaccine candidate in Bahrain.

Sinovac Biotech: China's Sinovac Biotech is conducting Phase III trials of coronavirus vaccine (CoronaVac) in Brazil and has lately applied for third phase clinical trials in Bangladesh. The Company has also commenced third phase clinical trials in Indonesia recently.

The other most talked-about drug candidate is Gilead Sciences Inc’s antiviral remdesivir. Remdesivir has stayed at the forefront of the battle against COVID-19 after the medicine helped shorten hospital recovery times in a clinical trial. The Company has recently sought US FDA approval for remdesivir.

Besides, UK-based biotech company Synairgen has recently declared positive breakthrough results from a clinical trial of a protein-based treatment for COVID-19.

The recent updates suggest that Russia is expected to become the first country across the globe in registering a vaccine against COVID-19, possibly on 12th August 2020.

While AstraZeneca is leading the vaccine race in terms of development, Moderna is not far behind. WHO Chief Scientist Soumya Swaminathan notified in late June 2020 that there may be one or two successful vaccine candidates against COVID-19 before the end of this year. However, the Organization has recently stated that it does not see any silver bullet at the moment to defeat coronavirus pandemic.

Australian Players in COVID-19 Vaccine/Treatment Run

In addition to global healthcare players, Australia-based entities are also making every possible effort to develop vaccine or treatment for the fatal disease.

  • The first clinical trials of a COVID-19 vaccine (COVAX-19) developed by Australian company Vaxine and researchers at Flinders University commenced in early July 2020.
  • The University of Queensland has also recently started dosing healthy adult participants in a Phase I clinical trial of its COVID-19 vaccine candidate.
  • Other healthcare companies that are evaluating potential COVID-19 treatments include Noxopharm Limited (ASX:NOX), Dimerix Limited (ASX:DXB) and Mesoblast Limited (ASX:MSB).

Moreover, the Australian Therapeutic Goods Administration (TGA) has lately awarded provisional approval for the use of Gilead Sciences’ remdesivir to treat Covid-19 patients.

The rising number of COVID-19 cases across the world and potential second wave of infections offer an enormous commercial opportunity for Australian healthcare players to discover a successful vaccine/treatment for the lethal disease.

Envisioning Healthcare Industry in Post-COVID-19 World

The latest study by McKinsey noted that the enhanced treatments for coronavirus are likely to be available by the end of 2020. The study also mentioned that only 12 to 18 months will be required to bring a vaccine to market at a sufficient scale for widespread immunisation, compared with the typical five or more years.

Moreover, burgeoning demand for healthcare treatments at home amid coronavirus-driven lockdowns is anticipated to bolster the adoption of telemedicine across different countries. With telemedicine being a cost-effective option, it can potentially bridge the gap between the rural and urban community.

Australian healthcare companies that are expected to benefit from the broader adoption of telemedicine comprise:

  • Australia’s leading digital medication management company MedAdvisor Limited (ASX:MDR) observed over 1.5 million patients connected to its platform amid coronavirus pandemic.
  • ASX listed digital health group, 1st Group Limited (ASX:1ST) has recently signed a strategic partnership with Openpay.
  • Digital health player ResApp Health Limited’s (ASX:RAP) first clinically validated and regulatory-approved respiratory disease diagnostic test, ResAppDx-EU has been lately launched on the Phenix Telehealth app.

Though lucrative opportunities are shining in healthcare space, investors need to stay abreast with economic transitions, duration of virus containment and drug/vaccine development to escape potential losses while investing in healthcare stocks.

 

There is no investor left unperturbed with the ongoing trade conflicts between US-China and the devastating bushfire in Australia.

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