Pharmaceutical Companies Are Doing Much More Than Battling COVID-19

The merger of Pfizer's Upjohn business with Mylan NV MYL, along with the potential of its COVID-19 vaccine candidate that it's developing with BioNTech, makes Pfizer a potential winner during COVID-19. Yet, Sanofi SA SNY is considered by many to be the closest to developing the vaccine. Last Friday, Paul Hudson said in an interview that early data further increased its confidence. Back in July, the company announced it is 70% more likely to create an efficient vaccine than its rivals, in part, due to its experience in vaccines. But also last week, the EU announced it will only partially cover vaccine makers against legal risks from potential side-effects.

The Good-Side Of Pharmaceuticals

Several big pharma companies are collectively investing close to $1 billion to help smaller biotechs. In July, over 20 top drugmakers announced the launch of the AMR Action Fund. Key investors in the AMR Action Fund include Dow Jones members Pfizer Inc. PFE, Merck & Co., Inc. MRK and Johnson & Johnson JNJ, but also Roche Holdings RHHBY and Eli Lilly And Co LLY.

Why Developing Antibiotics Is A Big Deal

The goal of this partnership is to develop between two and four new antibiotics by the end of the decade. The "AMR" stands for antimicrobial resistance. Bacteria continuously mutates becoming resistant to existing antibiotics. This mutation thus creates the need for new antibiotics.

Until now, only Pfizer and Roche have candidates in this segment that are up to the task. Pfizer has a late-stage candidate that is targeted at the bacteria that already developed a resistance to existing antibitoics. Roche is currently undergoing testing of an antibody-antibiotic conjugate aimed at staph infections.

Why It Should Matter To You

Untreatable bacteria would result in a far more terrifying scenario than the one we are currently in -- both in terms of deaths and antibiotic costs. Currently, around 700,000 people worldwide die due to antimicrobial resistance per year and that figure could increase to 10 million deaths per year by 2050.

Last year, the Centers for Disease Control and Prevention's (CDC) Antibiotic Resistance Threats Report identified five microbes as urgent threats, along with 11 others classified as serious threats. Studies found that up to 70% of bacteria have already developed some level of resistance to at least one antibiotic.

Midcaps Are Also In For The Race

Abbott Laboratories ABT came under the spotlight during the pandemic as it gained a sales boost for its diagnostics of COVID-19. This means Abott could easily adapt its diagnostics systems for detecting bacterial infection. The company even has other products such as a glucose monitoring system that will drive growth both during a pandemic and an antimicrobial resistance crisis.

Other Battles To Be Fought

Besides growing in all directions, Regeneron Pharmaceuticals Inc REGN is seeing demand approaching pre-COVID-19 levels. Its widely popular eye injection, Eyleam, brought in revenues of $1.8 billion during its second quarter. The company is waiting for approval from the FDA for its skin cancer therapy to treat other types of cancer. Studies showed Libtayo is three times more effective than existing therapies. This fact alone creates a market opportunity of $25 billion. Dupixent, an anti-inflammatory drug, is 70% effective at relieving symptoms of specific allergies and its sales increased by 70% year-over-year to nearly $1 billion during the quarter.

The Potential Of Cannabinoids

GW Pharmaceuticals GWPH is revolutionizing the way we treat seizures. Epidiolex is the first FDA-approved drug that derives its active pharmaceutical ingredient from marijuana. It can treat two rare forms of epilepsy. Clinical studies showed it decreases the number of seizures for 48%. Moreover, it also recently received a regulatory label expansion to treat tuberous sclerosis. This diagnosis is the underlying cause of a tumor that affects 50,000 patients in the U.S.

Outlook – COVID-19 Is Not Our Biggest Enemy

The bottom line is that besides COVID-19, there are way too many battles to be fought. And without new antibiotics, even routine infections could become deadly. The pandemic might have put the global economy to a halt, but it didn't pause cancer and many other deadly diseases. We are still far from winning COVID-19, but there are even worse scenarios. Whether you are a fan of pharma or not, our future is in their hands.

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