Pfizer, Defence Therapeutics, Novavax - Who will benefit from Omicron?

Pfizer - The big BioNTech partner still has a lot of potential

Together with Germany's BioNTech, Pfizer was the first to develop and get approval for an effective vaccine against the SARS-CoV-2 virus with its Comirnaty mRNA vaccine based on the active ingredient tozinameran. While the share price of the German partner has since then more than quadrupled, the Pfizer share price has only increased by a good 70% to date. And this, even though Comirnaty's sales account for more than 50% of Pfizer's total sales (Q3/2021: total sales USD 24.1 billion, of which USD 13 billion with Comirnaty). According to the group's management expectations, this percentage will increase even further in the following quarters as more and more countries rely on booster vaccinations.

Pfizer is also counting on being able to use the vaccine in children aged 5-11 in the future. In the US, Pfizer has already received emergency approval from the FDA (Food and Drug Administration, a federal agency for the protection of public health). It has launched the vaccination campaign directly after the official recommendation by the CDC (Centers for Disease Control and Prevention, similar to the German Robert Koch Institute). In Europe, BioNTech/Pfizer has also filed for approval in this age group with the EMA (European Medicines Agency) and expects approval before Christmas.

But even without that approval, Pfizer expects fourth-quarter sales of about USD 31 billion, which would be a whopping 210% increase over the corresponding quarter last year. But Pfizer is not relying on Comirnaty alone. In addition, the Company has an antiviral drug in the pipeline, Paxlovid, which reduced the risk of hospitalization and fatality from Covid-19 disease by 89% in a study of 1,219 PCR-positive-tested individuals. The compound, which is administered in tablet form, thus has the potential to be a new blockbuster drug.

Defence Therapeutics - Many arrows in the quiver

The Canadian biotechnology company Defence Therapeutics is also researching vaccines against the SARS-CoV-2 virus and recently completed its preclinical activities in this area. With its proprietary Accum™ platform, the Company uses a system not dissimilar to the mRNA process. The first vaccine candidate (DTC-PT001) is an injectable delivery form fortified with an FDA-approved adjuvant that provokes sustained high production of IgG (immunoglobulin G) antibodies.

The second vaccine formulation (DTC-IN003) is an intranasal vaccine that blocks transmission to stop infection. In addition to producing IgA (immunoglobulin A) antibodies on the mucosal surface, this vaccine elicits systemic immunity. A Good Laboratory Practice (GLP) challenge study is currently being conducted on this candidate, with results expected by the end of December 2021.

In addition to the Corona vaccines, the Canadians also have two human papillomavirus (HPV) vaccines in development. AccuVAC-PT009 uses a mixture of L1 proteins from different HPV strains. It is expected to be comparable in efficacy to MSD's (Merck Sharp and Dohme) Gardasil-9 vaccine already on the market.

The second candidate, AccuVAC-PT0067, is being developed specifically against cervical cancer. In addition to vaccine development, cancer therapy is a major area of focus. Using the Accum™ platform, ADC preparations (ADC = Antibody Drug Conjugates, i.e. the antibody-drug combination in a "piggyback" process) are being developed, which enable targeted and precisely dosed drug delivery to tumor cells without harming healthy tissue in the process. Defence Therapeutics succeeded in applying for four new patents last year.

The cancer therapy candidate AccuVAC-D001 increased the therapeutic effect of the vaccine by adding Accum™-bound antigens to allogeneic DCs (dendritic cells), and a survival rate of 70-80% was achieved (other currently experimentally tested DC-based therapies: 0-20%). The Company has now signed an agreement with a cleanroom provider in Canada to conduct test runs with its DC vaccine. The goal is to complete all required GLP studies by the first quarter of 2022 and conduct a Phase I trial for melanoma therapy in the UK by mid-2022. Currently, the Company is valued at approximately CAD 200 million.

Novavax - Is the group finally cashing in now?

USD 1.6 billion - Novavax collected more than any other manufacturer from the US government to develop a vaccine against the SARS-CoV-2 virus and build up vaccine production - with a market capitalization of just USD 4.6 billion at the time. Zero units of the vaccine Nuvaxovid, which was developed based on a protein vaccine, have been administered. The development and, above all, the production of the product, which many in the media incorrectly refer to as a "dead vaccine," proved to be more difficult than expected.

Especially for a relatively small company compared to its competitors. Time and again, successes were announced, and they had to be postponed time and again. Now, finally, the time seems to have come. Novavax has applied for approval in Europe, Great Britain, Canada and Australia, and the application to the FDA is to be submitted before the end of this year. Emergency approval has already been granted in Indonesia and the Philippines. CEO Stanley Erck expects to deliver up to 2 billion vaccine doses in 2022.

Novavax hopes to make up for its shortfall against the top dogs by ensuring that the vaccine has a similarly high efficacy to modern mRNA agents but is more tolerable. In addition, work is already underway to adapt the vaccine to the newly emerged omicron variant. The vaccine is expected to get an additional boost by combining it with seasonal flu vaccines, which could then be vaccinated together. It seems that the stock market does not trust the announcements made by Erck, who has often overshot the mark in the past. After all, Nuvaxovid would be the group's first completed development since it was founded 34 years ago.

There are two sides to everything. Even if Corona should keep its dignified grip on us for some time, it is still possible to capitalize on this. Pfizer is undoubtedly a relatively safe bet here. Novavax also seems to have finally arrived, with approval likely imminent in key markets. That will certainly give the share a boost. However, it remains to be seen whether the Company will succeed in catching up. The stock of Defence Therapeutics is attractive for investors who are willing to take risks. It is not just about the SARS-CoV-2 virus, but above all about cancer, a scourge of humanity that promises unbroken potential.