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Pharmaceutical Companies Gain in the Fight Against Covid-19

In the past month, the pharmaceutical index has declined about half as much as the Dow Jones Industrial Average and the S&P 500. That's logical considering science-based companies are those entities governments and the public are relying on to produce tests to detect the Covid-19 virus and, hopefully, develop a vaccine and a treatment.

Shares of one of the larger-cap companies, Regeneron (RGEN), are up about 25% in the past 30 days. The Tarrytown, New York-based company has had a relationship since 2014 with the Department of Health and Human Services' Biomedical Advanced Research and Development Authority (BARDA). In early February, the two entities said they would use part of a Regeneron discovery system to look for monoclonal antibodies against the Covid-19 virus.


There is some precedent here. The technology platform was previously used to develop monoclonal antibodies against the Ebola virus, used in a recent outbreak in the Democratic Republic of the Congo, and the MERS coronavirus, according to an article in Feedspot. The system, HHS said, helped shorten processes like antibody discovery and selection and manufacturing for preclinical and clinical studies.

Regeneron said its development work is advancing faster than anticipated and the company might be able to start testing its treatment in humans in early summer, according to an article in Bloomberg. Of course, there are a lot of tough hurdles to negotiate before any Regeneron drug becomes a reality, and even at that it might be just one of a cocktail of drugs used against the novel coronavirus.

Of course, the development of a new drug is fraught with obstacles that could sidetrack even the most promising treatments. In the case of the Regeneron candidate, testing is probably months away and making it widely available is further out.

On the preventative side, the first patient was dosed with the Moderna Inc. (NASDAQ:MRNA) vaccine on March 16. The trial, which will include 45 young, healthy volunteers, is being conducted at the Kaiser Permanente Washington Health Research Institute in Seattle, according to an article in BioSpace. Moderna shares have gained 50% in the past month and, at more than $30, are at a five-year high.

Among the other companies and institutions working on a vaccine are Inovio Pharmaceuticals (NASDAQ:INO), which expects to begin trials next month.

Israel's health ministry fast-tracked approval for several novel coronavirus treatments in hopes of easing the severity of Covid-19 cases in the absence of a fully tested therapy, reported FiercePharma. The three medications are the antiviral remdesivir from Gilead Sciences (NASDAQ:GILD), AbbVie's (NYSE:ABBV) Kaletra and the malaria treatment chloroquine. All three drugs are being used in other countries hit by the pandemic.

Shortly after authorizing the emergency use of Roche's (RHHBY) Covid-19 diagnostic, the Food and Drug Administration did the same for Thermo Fisher Scientific's (NYSE:TMO) test. Perhaps the news will jumpstart the shares of both companies, which have been in the doldrums.

Other companies working in the increasingly crowded field include Johnson & Johnson (NYSE:JNJ), whose shares are down more than 12% in the past month; Sanofi (SNY), down 20%; BioNTech SE (BNTX), the vaccine company whose shares have gone from $31 to more than $187 in the past month as it has gained attention from Pfizer (NYSE:PFE); Vir Biotechnology (NASDAQ:VIR), a San Francisco-based company whose shares have climbed about 180%, is working with Biogen (BIIB) to learn whether antibodies from people who survived SARS could serve as a treatment for Covid-19.

Disclosure: The author has positions in Gilead Sciences, Johnson & Johnson and Pfizer.

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This article first appeared on GuruFocus.