The stock market goes up on the hope of a pharmaceutical solution against the coronavirus – here is how close we are

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Markets have applauded in recent weeks the monumental efforts by Congress and the Federal Reserve to protect the US economy from the impact of the coronavirus. But for Wall Street traders, a vaccine, or at least an effective therapy, remains the market’s # 1 goal in trying to recover more from the historic decline and one day recover a new high.

Below is an updated overview of who is working on coronavirus drugs and their proximity. Efforts to develop a vaccine look promising at Moderna, Johnson & Johnson and Pfizer, while the drug remdesivir from Gilead Sciences made headlines this weekend over an anecdotal report of its success in treating symptoms.

While large spending and small business loans can provide some leverage in the short-term market, investors believe the speed at which the country’s largest health care companies can produce a Covid-19 remedy and bring back Americans at work is the key.

“All the while, as business continued to climb, the Federal Reserve showed such strength and diligence that it helped support market stability throughout the financial structure,” wrote Quincy. Krosby, chief market strategist at Prudential Financial, in an email.

“This is where science comes in: as long as there are no effective and readily available therapies, the fear of a second wave will prevent the economy from returning to what was normal,” he said. she adds.

The eradication of the coronavirus is so critical to the health of the US economy that investors have refueled stocks (both the large market and sole proprietorships) at the earliest signs that the number of new cases could slow.

And the upward trend was well visible this week, when a report said that a Chicago hospital using Gilead’s remdesivir in a trial appeared to ease symptoms of Covid-19 in the majority of patients treated with the drug.

The University of Chicago’s phase 3 drug trial said most of his patients had “rapid recoveries from fever and respiratory symptoms,” two hallmarks of Covid, the report said. Most patients were discharged in less than a week, the health care publication STAT News reported, citing a video it obtained from doctors discussing the trial.

Although the company later warned that such anecdotal evidence does not prove that remdesivir is a reliable therapy for Covid, Gilead’s action jumped nearly 10% on Friday and helped lift the main stock indexes to de solid gains since the start of the week.

“The ultimate phase for the market and for the overall trajectory of the economy – and the path to a more” normal “normal – is the vaccine,” wrote Krosby of Prudential. “This is crucial and will be the most important inflection point for the market – this is why during this profit season, it will be the headlines about therapies and vaccines that will guide investors. “

Renewed hopes for effective therapy have helped the S&P 500 close above its 50-day moving average for the first time since February 21 and gain more than 3% for the week by Friday closing. The index is up more than 19% in one month as the number of new COVID-19 cases in the United States continues to slow.

Moderna rose more than 15% on Friday after the biotech company announced that the federal government had approved $ 483 million in funding for its vaccine production and distribution efforts.

“We are in a bargaining range, a botched bargaining range, until we are confident that we have a vaccine or treatment that can guarantee that consumer behavior will not be seriously altered,” said Dennis DeBusschere, director of Evercore ISI. portfolio strategy, which closely tracks the evolution of incremental drugs for clients.

“Until you have an effective treatment or vaccine, you are in the cloud of second wave risk and people are more careful about how they interact,” said Evercore strategist. He added that until that time, restaurants, malls and other retailers who cannot guarantee social distancing could face persistent financial headwinds.

Trying to price a treatment is tricky, said DeBusschere, based on what it would take for patients. More complex treatments, such as a trip or two to the hospital for an IV remedy, could take a long time to reach the population and require a lot of effort.

“The destination is easier than the trip: it looks like the chances of a vaccine in the next 12 to 18 months are relatively high, as are the chances of temporary treatment to help close the gap,” said he declared.

DeBusschere nonetheless credited expectations for a pharmaceutical remedy for much of the market recovery from its trough on March 23.

“I would say that the vast majority of the exit from depression is linked to the evolution of health care,” he said. “Most people believe that we are going to get some sort of vaccine. “

Vaccines

The race is most intense for a vaccine, a competition that so far includes major drug manufacturers Johnson & Johnson, Pfizer and Moderna.

1) Johnson & Johnson

As one of the leading pharmaceutical companies working on a vaccine, Johnson & Johnson said on Tuesday that it aims to produce between 600 million and 900 million doses of its own pending treatment by the end of the first quarter of 2021 for emergency cases.

J&J also said it has committed more than $ 1 billion in investment in partnership with the Federal Biomedical Advanced Research and Development Authority, part of the Department of Health and Human Services, to co-fund research on vaccines.

Company executives have said that if the phase I trials scheduled for September go according to plan, they could produce 1 billion doses or more per year. “We have very good early indicators that not only can we depend on that to be a safe vaccine base but also one that will ultimately work,” said Alex Gorsky, CEO of J&J at CNBC in March.

2) Moderna

Moderna may have been the first company to deliver the first experimental virus vaccine to US government researchers when the first batch was shipped in February.

The company said in late February that it plans to start a clinical trial of around 20 to 25 healthy volunteers by the end of April to see if two doses of the remedy are safe and effective in developing immunity.

The U.S. government has bolstered Moderna’s research and development efforts with additional funding of $ 483 million, the company announced on Friday.

Moderna CEO Stephane Bancel said on CNBC’s “Squawk Box” on Friday that funding was especially important to help manufacturing efforts. “Instead of waiting for the data and then taking it to the next level with the manufacturing process … we can make as many doses as possible. We are doing both in parallel, “he said. The company plans to hire up to 150 people to support the effort.

President Noubar Afeyan told CNBC earlier in April that the drug had entered phase I trials and hoped to enter phase II by late spring or early summer. Dr. Anthony Fauci, central health adviser at the White House and director of the National Institute of Allergy and Infectious Diseases, said the Moderna phase I trial was launched at “record speed”.

3) Pfizer

New York-based Pfizer is also working on a vaccine, which the drug maker hopes to start testing in patients in the summer of 2020. Scientific director Mikael Dolsten said earlier in April that the candidate vaccine works by limiting the ability of the virus to replicate or grow.

Pfizer originally planned to start clinical trials for its candidate Covid-19 by the end of the year, but it went back in time to start in the third quarter.

In addition to this effort, Pfizer is working with BioNTech SE from Germany to generate a vaccine based on cutting edge gene technology. Pfizer anticipates that trials of this vaccine will begin in late April.

While the months-long search for a viable and effective drug candidate may seem slow to those unfamiliar with the healthcare industry, Jefferies healthcare strategist Jared Holz warned that forecasts current ones represent a dizzying speed.

“Typically, vaccines from start to finish can take up to ten years; we’re talking about two years or less here, ”he wrote in an email. “The main factor (s) promoting optimism are government authorities (including the FDA) who intend to speed up the process in order to save the country / the world from this epidemic. “

“Moderna, Johnson & Johnson and Pfizer seem to be leading, so to speak,” he added. “In this scenario, given the gravity of the situation, the first advantage in the market could be quite significant. “

4) Others

Rockville, Maryland-based Novavax vaccine candidate, nicknamed NVX-CoV2373, neutralizes a “spike” in proteins that the virus can induce in patients. The company said on April 8 that the vaccine candidate had shown a strong immune response in the animals tested and that its phase 1 trial in approximately 130 adult humans is scheduled to start in mid-May.

Inovio Pharmaceuticals, meanwhile, said on April 6 that the Food and Drug Administration had accepted its candidate vaccine, INO-4800, paving the way for phase 1 human trials. The company added that the phase 1 study enroll up to 40 healthy adult volunteers in Philadelphia and each participant will receive two doses of INO-4800 four weeks apart. Initial immune responses and study safety data are expected by the end of the summer.

Treatments

There is also fierce competition to develop and deploy therapies for those suffering from Covid-19 over the next year. Some of the biggest companies working on treatments include Gilead Sciences, Eli Lilly and a partnership between Regeneron and Sanofi.

1) Gilead Sciences

Gilead’s drug remdesivir continues to show promising results in small groups of patients, the latest being detailed in the aforementioned study at the University of Chicago. In addition to these results, the company said on April 10 that a cohort of 53 patients with severe cases of Covid-19 had received treatment through the “compassionate use” program and that a majority of those treated ” showed clinical improvement and no new safety signals were identified. ”

Although Gilead has repeatedly warned that more rigorous studies must be carried out before appointing a treatment for remdesivir, the first promising results have fueled both unprecedented demand for the drug and the company to accelerate production. It aims to produce enough doses to provide treatment for more than 500,000 patients by October and another 500,000 by the end of 2020.

The drug maker said on April 4 that it has 1.5 million individual doses, enough to feed more than 140,000 patients.

2) Regeneron and Sanofi

Regeneron Pharmaceuticals and French multinational pharmaceutical company Sanofi are focusing on clinical trials to see if their arthritis medication, Kevzara, could treat the symptoms of Covid-19.

Research is looking into whether a class of drugs already on the market to treat immune disorders like rheumatoid arthritis could also be taken to lessen the damage to the lungs caused by the overreaction of the immune system to the virus that causes Covid-19. Some doctors believe that drugs that can suppress the immune system may be helpful in limiting the body’s destructive response to the new coronavirus.

The partnership has launched trials in Italy, Spain, Germany, France, Canada, Russia and the United States. Regeneron said last month that the US trials will start in New York and that the phase II / III trial will enroll up to 400 patients.

3) Eli Lilly

Eli Lilly is working with the National Institute of Allergy and Infectious Diseases to see if his own FDA-approved rheumatoid arthritis drug could serve as another option in the arsenal for healthcare providers. The company said on Friday that it agreed to study whether baricitinib could be an effective and safe treatment for hospital patients diagnosed with Covid-19.

The study, which is slated to begin in the United States this month, will then be extended to Europe and Asia with results expected by the end of June. The company theorizes that the anti-inflammatory effects of baricitinib could slow the body’s reaction to the virus.

“Lilly is moving at full speed and using all available resources to help fight this pandemic,” said Daniel Skovronsky, scientific director of Eli Lilly, on April 10.

4) Others

There are also a number of other possible antiviral remedies in the works, including hydroxychloroquine and chloroquine, two generic antimalarial drugs.

Proven to work in the treatment of lupus and rheumatoid arthritis (like those tested by Regeneron, Sanofi and Eli Lilly), President Donald Trump trumpeted hydroxychloroquine as a potential “game changer” in the national fight against coronavirus .

NYU Langone researchers launched one of the largest formal studies in the United States on March 24 to evaluate the drug and aim to test 2,000 adults who have been in close contact with confirmed Covid patients.

But chloroquine (from which hydroxychloroquine is derived) can have serious side effects such as muscle weakness and cardiac arrhythmia. A small study in Brazil was discontinued this month for safety reasons after coronavirus patients taking chloroquine developed arrhythmia, including some who have died.

Read all CNBC coronavirus coverage here.

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