- Biotech companies are racing towards creating vaccines or treatments to make the world pandemic free, though not anticipated in near future
- Mesoblast Limited and Cynata are using stem cell therapies and have launched clinical trials to fight SARS-CoV-2, then causative agent of COVID-19.
- While large cap CSL is involved in developing plasma-based treatment for COVID-19, Small cap Biotron is investigating its compounds against SARS-COV-2
As on 19 June 2020, the “pneumonia-like” illness has taken 456,432 lives with 8,538,928 confirmed cases recorded worldwide. And with no sign to the ending of this human loss, an indispensable need for a vaccine or a treatment has arisen.
Australia's Biotechnology sector is racing towards finding a cure for SARS-COV-2 with many companies demonstrating vaccines or treatments which are set for commercialisation or going through clinical trials. While the healthcare stocks have experienced a hit, stocks of companies with a COVID-19 product have been performing relatively well amid pandemic indicating their attractiveness to investors.
As COVID-19 continues to effect economies and a second wave anticipated in late 2020, the market for the COVID-19 treatments and products are expected to stay for long run, creating opportunities galore for their shareholders to earn big. Let us cast an eye on few large cap and small cap biotech companies proving to be a gold mine for their investors.
CSL Limited (ASX:CSL)
CSL Limited, the 3rd largest global biotech player, is engaged in developing biotherapies and influenza vaccines for people with life-threatening medical conditions. The company operates eight manufacturing sites located at Australia, China, the UK, Germany, Switzerland, and the US. The company also operates over 257 plasma collection centres at North America and Europe.
Resignation of CFO, Mr. David Lamont on 17 June was bit of a shocker with share prices taking a slight dip, however, the market soon started taking a positive turn. CSL is developing plasma-based treatment for COVID-19 patients with severe infection. The Company claimed in its presentation reports that it is providing additional southern hemisphere influenza vaccine doses across Australia during the COVID-19 crisis along with its expertise, technologies, equipment and with materials to offer support in response to COVID-19.
On 9 June, the company announced that it is set to acquire a clinical-stage biotechnology company, Vitaeris Inc. with whom the company shares a strategic partnership since 2017 to expedite the development of clazakizumab. clazakizumab is a phase III candidate of Vitaeris indicated for treating chronic active antibody-mediated rejection (AMR). The acquisition will add clazakizumab to the current product pipeline of CSL comprising CSL842 and CSL964 as part late-stage development products addressing unmet needs in the transplant.
On 5 June, CSL announced the partnership with the University of Queensland (UQ) and CEPI to advance development and manufacture of COVID-19 vaccine candidate in which CEPI and CSL will share costs related to the clinical development and manufacture of the vaccine candidate. If clinical trial gets successful, a vaccine is expected to be available in the market by 2021.
On 27 May 2020, CSL and Thermo Fisher Scientific entered a long term strategic partnership for the lease of the manufacturing facility of CSL, currently under construction in Switzerland, to be completed in 2021. According to the agreement, after construction, Thermo Fisher would be operating the Lengnau facility taken under lease from CSL and will be producing to assist the CSL biologics portfolio including undertaking other contract manufacturing services such as packaging and finishing for several CSL products.
On 7 May, the company announced a new US$ 750 million private placement which is expected to strengthen the group’s current debt position and the proceeds will be used for meeting general corporate purposes.
CSL closed the day’s trade at AU$ 288.250 on 19 June 2020, up by 0.83% from its previous close.
Mesoblast Limited (ASX: MSB)
Mesoblast (ASX:MSB) (Nasdaq:MESO) provides allogeneic cellular medicines by developing and commercialization of the same for treatment of life-threatening inflammatory diseases. The Company holds a strong product pipeline with three leading candidates at Phase 3 clinical trials. The company is gaining limelight for its third phase candidate - remestemcel-L indicated for severe acute respiratory distress syndrome (ARDS) due to COVID-19 infection. Other third phase candidates include REVASCOR® and MPC-06-ID.
On 1 June 2020, Mesoblast announced positive result for its lead mesenchymal stem cell (MSC) product remestemcel-L which showed efficacy in patients with chronic obstructive pulmonary disease (COPD) and an elevated state of inflammation resulted in improved respiratory and functional outcomes in its phase 2 trial.
The company’s most advanced stage leading product, RYONCILTM, treating acute GVHD, is currently ongoing registration process for worldwide commercial launch excluding Japan, RYONCILTM will be marketed by JCR Pharmaceuticals.
Financial Highlights for Nine Months of FY2020
In 9M of FY2020 ending March 2020, MSB recorded revenue of US$ 31.5 million, a 113% increase compared to 9M revenues of FY2019. The improvement in revenue was driven by 81% growth in royalty revenues to US$ 5.9 million from sales of TEMCELL HS Inj.® in Japan and 127% increase in milestone revenues to US$ 25.0 million from strategic partnerships as compared to 9M of FY2019
Mesoblast’s cash on hand was recorded at US$ 60.1 million as of 31 March 2020 with an additional US$ 67.5 million may be accessible using current financing capabilities along with strategic partnerships in next one year. The company intends to use proceeds to launch RYONCIL indicated for acute GVHD commercially and for other manufacturing capacity enhancements and supporting clinical programs.
Mesoblast closed the day’s trade at AU$ 4.14 on 19 June 2020, up by 3.5% from its previous close.
Cynata Therapeutics Ltd (ASX:CYP)
Despite trading more than 30% lower from the starting of the 2020, Cynata Therapeutics’s Cymerus platform stem cell technology is set to be investigated as a treatment for ARDS associated with COVID-19.
Cynata is engaged in the development and commercialization of a mesenchymal stem cell (MSC) technology for therapeutic area Cymerus. Its Cymerus technology allows manufacturing of MSCs from a single donor and a single donation and can be used for treating unrelated patients.
In May, Cynata received approval from ethics committee to commence clinical trial for investigating early efficacy of Cymerus MSCs for COVID-19 infected ICU patients in Australia.
On 24 April 2020, Cynata published its quarterly report and Appendix 4C for the quarter ended 31 March 2020, in which the Company put emphasis on its strong cash position with nearly $6.9 million in cash as of 31 March 2020. The company also announced securing of AU$3.55 million via an institutional Placement following to the quarter, and an SPP to build up to $2 million.
Apart from clinical trials associated with COVID-19 treatment, the company has reached milestone with respect to its Phase 3 Osteoarthritis clinical trial. On 18 June the company received ethics approval and expedited regulatory pathway for its Phase 3 clinical trial of CYP-004 or osteoarthritis clinical trial.
Cynata showcases a strong product pipeline which covers a product meant for adults admitted to intensive care with COVID-19. With Vaccines not being 100% effective and takes time in covering a community, the product carries a good long-term potential to bring in revenues for the company.
Cynata closed the day’s trade at AU$ 0.650 on 19 June 2020, down by 2% from its previous close.
Biotron develops and commercialises drugs indicated for viral diseases with unmet medical need. The company came into focus after announcing expanding of its drug candidates against coronavirus (COVID-19).
Since February, the company had been testing compounds against SARS-COV-2, the causative agent of COVID-119. The company has highlighted that these compounds can reduce coronavirus levels by 90 – 100 per cent. The tests are progressing as quickly as possible, as updated by Biotron in late-February.
The company’s lead candidate BIT225 is in Phase 2 development indicated for HIV-1 and Hepatitis C virus infections and moreover, the Company has a strong preclinical pipeline of compounds to be investigated for broad range of viral diseases.
Biotron closed the day’s trade at AU$ 0.078 on 19 June 2020, unchanged from its previous close.
Disclaimer: All the currencies mentioned are in AUD unless specified