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Antibodies to the rescue? According to a top U.S. health official, the U.S. government expects to provide 1 million doses of antibody treatments for COVID-19 similar to the one President Trump received at no cost.
Currently, the administration’s Operation Warp Speed program has “a couple of hundred thousand doses” of the antibody treatments being developed by Regeneron and Eli Lilly. The therapies differ in that Regeneron’s is a cocktail or combination of two monoclonal antibodies, while Eli Lilly’s approach uses a single antibody.
The President received Regeneron’s treatment under “compassionate use”, or when the FDA allows access to experimental drugs outside of clinical trials for patients with life-threatening or serious diseases, and has stated that he is working to get both candidates approved quickly. Now, AstraZeneca has received $486 million from the U.S. Government for 100,000 doses of its experimental antibody cocktail, AZD7442.
Against this backdrop, Wall Street sees an opportunity emerging, should the drugs be granted Emergency Use Authorization (EUA) by the FDA. To this end, the pros are pounding the table on three COVID-19 antibody stocks that are positioned at the front of the pack.
Using TipRanks’ database, we got to the bottom of it, and learned what makes these names so compelling.
Eli Lilly & Co. (LLY)
Founded back in 1876, Eli Lilly works to create high-quality medicines that meet the needs of patients from all over the world. Based on the promising results for its COVID-19 antibody candidates, Wall Street focus has locked in on the healthcare heavyweight.
J.P. Morgan’s Chris Schott tells clients that its two assets, bamlanivimab (LY-CoV555, developed as part of a collaboration with AbCellera) and etesevimab (LY-CoV016), have already exhibited impressive performances. Bamlanivimab is being evaluated as a monotherapy in the BLAZE-1 study. The same study also features a bamlanivimab plus etesevimab combination (LYCoV016, collaboration with Junshi).
Looking at the available data, both the antibody monotherapy and combination arms met the primary endpoint of a significant reduction in viral load as well as key secondary endpoints for reduction of COVID-related symptoms, hospitalization and ER visits or death.
That said, the combination arm appeared to be more potent than the monotherapy, showing an 84.5% reduction in the risk of COVID-related hospitalizations. In terms of safety, both arms were well tolerated, with no clinically meaningful treatment-related adverse event differences witnessed across treatment groups.
The implication? The BLAZE-1 results position LLY for a potential near-term FDA EUA approval, with supplies ramping for both assets in Q4 2020, in Schott’s opinion. He further noted, “Overall, Lilly’s execution on the COVID-19 antibody program has been impressive (quickly partnering and rapid clinical/manufacturing development), and the product will play an important role in addressing the pandemic prior to a broader vaccine becoming available.” However, if a vaccine becomes available, it may impact the commercial opportunity.
All of this combined with its healthy base business, a growing portfolio of new launches (Retevmo, Emgality) and cutting-edge pipeline assets (tirzepatide, mirikizumab, Loxo-305, several Alzheimer’s call options) as well as a significant margin expansion story make LLY the “best-positioned growth story,” according to Schott.
As a result, Schott puts an Overweight (i.e. Buy) rating and $190 price target on the stock. This target brings the upside potential to 21%. (To watch Schott’s track record, click here)
Most other analysts echo Schott’s sentiment. 6 Buys and 2 Holds add up to a Strong Buy consensus rating. Given the average price target of $174.25, the upside potential comes in at 11%. (See Eli Lilly stock analysis on TipRanks)
Regeneron Pharmaceuticals (REGN)
After the President received its investigational antibody treatment, Regeneron has taken center stage on the Street. While more data is needed, several analysts see immense potential and think now is the time to get on board.
Writing for Canaccord, 5-star analyst John Newman stands among the REGN bulls. Its experimental antibody cocktail, REGN-COV2, demonstrated impressive results, reducing viral levels of COVID-19 and improving symptoms in non-hospitalized patients. The analyst believes this validates the approach.
The greatest benefit was seen in seronegative patients, or those without antibodies to COVID-19, and high viral load patients. On top of this, the candidate exhibited a robust safety profile, with the placebo showing higher rates of Treatment Emergent Adverse Events and Serious Adverse Events.
What’s more, the therapy resolved symptoms faster than the placebo as viral load levels increased, meaning that there could be a “greater potential benefit in sicker patients,” according to Newman. “REGN-COV2 must also generate benefit among hospitalized COVID-19 patients, which should occur, given up to 10x higher viral load at baseline, and higher REGN-COV2 activity as viral load increases. Viral load should also decline more slowly for hospitalized COVID-19 placebo patients, potentially enabling a larger difference for REGN-COV2,” the analyst mentioned.
When comparing REGN’s therapy to LLY’s, both reduce viral load by a similar amount. Although the metric was different, REGN-COV2 showed faster symptom reduction compared to the placebo, and LLY's candidate reduced symptoms versus the placebo.
Most important, however, is the fact that the REGN-COV2 antibody cocktail showed better efficacy for higher viral load, in Newman’s opinion. LLY didn’t disclose any data regarding whether or not its antibody cocktail performed better in patients with higher viral load at baseline, so additional data is needed to draw more concrete conclusions.
If that wasn’t enough, REGN has reached an agreement with Roche, which Newman thinks will significantly expand its manufacturing capacity.
Summing it all up, Newman commented, “We are encouraged by REGN-COV2 data and see a strong need in the seronegative patient population. We also believe that the drug can be used at a lower dose, extending dosing capacity. We look forward to additional cohort data, as well as hospitalized patient data.”
In line with his optimistic approach, rates REGN a Buy rating along with a $700 price target. Investors could be pocketing a gain of 16%, should this target be met in the twelve months ahead. (To watch Newman’s track record, click here)
Turning to the rest of the Street, the bulls have it on this one. With 9 Buys and 7 Holds, the word on the Street is that REGN is a Moderate Buy. At $668.36, the average price target implies 11% upside potential. (See Regeneron stock analysis on TipRanks)
Vir Biotechnology (VIR)
Last but not least we have Vir Biotechnology, a company that combines immunologic insights with cutting-edge technologies to treat and prevent serious infectious diseases. As some analysts see President Trump’s treatment with REGN’s monoclonal antibody cocktail as a good thing for VIR, they argue it’s time to pull the trigger.
H.C. Wainwright analyst Patrick Trucchio told clients, “We cannot think of a higher profile public official to validate the monoclonal antibody approach than President Trump.”
Currently, 11 former and current U.S. government officials have tested positive for COVID-19 after a Supreme Court of the United States (SCOTUS) event on September 26. “We think some officials could be treated like Mr. Trump via a combination of antivirals and anti-inflammatories much sooner than has been typical, successfully. To us, the White House outbreak could accelerate an emergency use authorization (EUA) for monoclonal antibody for COVID-19, which we believe is potentially very positive for Vir,” Trucchio explained.
Additionally, the analyst thinks VIR’s candidate could differentiate itself from its peers. On October 6, along with its partner, GlaxoSmithKline, VIR revealed that its COVID-19 monoclonal antibody, VIR-7831, had progressed through Phase 2 and is advancing to Phase 3 in the pivotal COMET program. The first trial, COMET-ICE, will assess the asset in early stage disease patients, with initial data set to come by the end of 2020. Top-line data could then be released in January 2021.
To this end, Trucchio cites the high barrier to resistance, potent effector function, the potential for increased lung tissue concentration and extended half-life as possible areas of differentiation. “We note that Vir has generated positive antiviral data in Ebola, demonstrating its platform's antiviral capabilities,” he commented.
Adding to the good news, VIR is developing siRNA conjugates as a potential COVID-19 treatment, as part of a collaboration with Alnylam. Recently, Alnylam presented data outlining two siRNA triggers, the platform's capabilities in lung delivery and, for the first time, disclosed a possible complete clinical development program.
Weighing in on this, Trucchio said, “To us, RNA interference (RNAi) could have advantages over monoclonal antibodies as an antiviral treatment including on efficacy and dosing frequency.” Although a specific timeline hasn’t been announced, the analyst thinks the IND submission could take place by the end of 2020 and the Phase 1 and 2/3 trials could be completed in 2021.
It should come as no surprise, then, that Trucchio sides with the bulls. In addition to a Buy rating, he increased the price target from $80 to $100, indicating 145% upside potential. (To watch Trucchio’s track record, click here)
Looking at the consensus breakdown, 5 Buys, 1 Hold and 1 Sell have been issued in the last three months. Therefore, VIR gets a Moderate Buy consensus rating. Based on the $55 average price target, shares could surge 35% in the next year. (See VIR stock analysis on TipRanks)
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Disclaimer: The opinions expressed in this article are solely those of the featured analysts. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.