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Sanofi Partners With Translate Bio on Covid-19 Vaccine

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GuruFocus.com
·3 min read
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Shares of Lexington, Massachusetts-based biotechnology company Translate Bio Inc. (NASDAQ:TBIO) climbed about 7% to nearly $11.50 on March 30 after the company announced its collaboration with Sanofi (NASDAQ:SNY) to jointly develop a novel messenger RNA (mRNA) vaccine for Covid-19. The stock has since increased to just under $10.

Perhaps many of the gyrations in the share price of Translate and other smaller-cap pharma stocks indicates investors are overreacting to Covid-19 announcements. A day or two later, they may realize just how difficult it's going to be to develop an effective vaccine or treatment and the time required. Sure, the U.S. government said it wants to have a vaccine in 12 to 18 months, but some experts think it could take up to five years.


Perhaps Translate and partner Sanofi Pasteur will surprise the skeptics. The partners are developing a vaccine for preventing the virus, building on a two-year alliance to create vaccines using mRNA technology. (This is the same platform used by Moderna (NASDAQ:MRNA), which was called "unproven" in an April 17 article.)

The collaboration--whose value was not disclosed--will marry the vaccine expertise and external research networks of Sanofi Pasteur, Sanofi's vaccines global business unit, with Translate Bio's technology, according to an article in Genetic Engineering News.

Translate said it has started producing multiple mRNA constructs toward the vaccine and has established 100 gram single-batch production with its clinical-stage mRNA therapeutics platform. In science, construct validity is the degree to which a test measures what it claims.

"Ideally, we'd like to get to one construct, but we'll evaluate multiple constructs until we get to that point," Translate Bio CEO Ronald C. Renaud Jr. told GEN. "We'd like to take all of these into animal testing as quickly as possible, and then make decisions on where we think the best approach is going forward."

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The companies hope to begin human testing by the end of the year or early next.

The Covid-19 program is not included in the five infectious disease programs Sanofi and Translate are working together on as part of their collaboration, which could be worth more than $800 million. The targets of those programs have not been made public.

Just a day before the announcement of the Sanofi agreement, Translate had some bad news. The company said delays were likely in phase 1 and 2 testing of its top clinical program to treat cystic fibrosis as health care institutions have turned their attention to the pressing needs caused by Covid-19.

According to TipRanks, the two analysts covering Translate rate it a buy, with an average price target price of $21.50. It has a high of $25 and a low of $18.

Disclosure: The author holds no positions in any of the stocks mentioned in this article.

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This article first appeared on GuruFocus.