Pharma Giants Go After $10 Billion Market With RSV Drugs

Results of clinical trials expected sometime about mid-year

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Jan 18, 2022
  • Nine other drug tests have potential to move shares of companies involved.
  • Gilead could climb 5% to 8% if cancer drug works, says analyst.
  • Intercept banking on NASH treatment to resurrect stock.
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GlaxoSmithKline PLC (GSK, Financial), Pfizer Inc. (PFE, Financial) and Johnson & Johnson (JNJ, Financial) should all know about mid-year if the shots they're developing for a common and potentially fatal virus is effective. No, the target isn’t Covid-19, but respiratory syncytial virus, which causes an estimated 177,000 hospitalizations among older adults each year and 58,000 in children under five. Currently, the only way to treat RSV is through an antiviral drug.

BioPharma Dive reported the potential market for an effective RSV jab is highly lucrative, reaching as high as about $10 billion by 2028 according to Cowen analysts.

The RSV clinical trials are among 10 key clinical studies identified by the publication that investors might want to follow closely due to their potential to move the shares of the companies involved.

Positive results in RSV, breast cancer, schizophrenia and Alzheimer's could once again make biotechs a favorite among investors, as they were a year ago before several factors, including clinical and regulatory setbacks, and concerns about drug pricing controls pummeled the shares of many companies. How bad was it? Nearly 80% of the 2021 initial public offerings were trading under their offering prices, according to data from BioPharma Dive.

Gilead Sciences Inc. (GILD, Financial) shares could add 5% to 8% if the company’s cancer drug Trodelvy performs well in a phase 3 study, according to Brian Abrahams, an analyst at RBC Capital Markets. He wrote that a successful outcome could thrust the company into a $2 billion revenue opportunity.

Trodelvy is currently approved for late-stage use in triple-negative breast cancer and a form of bladder cancer. To become a blockbuster, the drug has to work in patients with a type of breast cancer that accounts for the majority of all cases.

A lesser-known name, Karuna Therapeutics Inc. (KRTX, Financial), is hoping its medication to treat elusive psychiatric disorders will pass muster. Strong results from a phase 2 test of KarXT boosted the company’s market value by billions. The same could happen when the results of the company’s phase 3 study are revealed by the middle of the year.

Few stocks have fallen further from grace than New York City-based Intercept Pharmaceuticals Inc. (ICPT), which traded at well over $400 way back in 2014 and was at about $108 as recently as November 2019. Its current price is $17.34.

The company’s downfall can be traced to problems with its drug to treat a fatty liver disease known as NASH. The Food and Drug Administration looked at how the drug performed in a phase 3 study and decided the potential risks were greater than the benefits. The agency asked Intercept for more data from the trial, leading to a lengthy delay, a corporate restructuring and several senior executive departures.

But all is not lost. Intercept could still earn the first NASH drug approval if updated study results, expected early this year, are good.

Results from other key clinical trials expected in the first half of the year are:

  • Pfizer Inc. (PFE, Financial) and Arena Pharmaceuticals Inc.'s (ARNA, Financial) small molecule for ulcerative colitis.
  • Sanofi (SNY, Financial) and GlaxoSmithKlein's protein vaccine for Covid-19.
  • Roche's (RHHBY) antibody for Alzheimer’s disease.
  • AbbVie Inc.'s (ABBV, Financial) small molecule for cystic fibrosis.
  • Allogene Therapeutics Inc.'s (ALLO) cell therapy for lymphoma.
  • Alnylam Pharmaceuticals Inc.'s (ALNY) RNA interference for cardiomyopathy.


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