(Newswire.net — May 5, 2020) — Investors understand that for the global economy to come back, there is a clear need for a vaccine. Sure, social distancing techniques can allow employees and consumers to find a way to define a new normal, but for group gatherings to reconvene, the world will need a vaccine. The demand is so high, that every announcement about a potential vaccine is welcome with open arms and a surge in riskier assets. Meanwhile, global economic growth continues to breakdown, with the US and Europe both showing approximately 4% declines in Q1 GDP.
Recent News on the Medical Front
Late April and early May brought a slew of new data points that helped generate optimism. On the vaccine front, partnerships continued to form, and the enthusiasm was cheer led by the White House. President Donald Trump, the head cheerleader said that he was confident there will be a coronavirus vaccine by the end of the year. Despite the President’s enthusiasm, there is skepticism from vaccine makers. For example, Severin Schwan, CEO of pharmaceutical giant Roche, said that the president’s proposed time frame was an ambitious goal.
Vaccine Distribution Should Accelerate
While most vaccine makers who are focusing their efforts on COVID-19 believe it will take 12-18 months to produce a vaccine that is safe and effective, it has not stopped these companies from forming distribution alliances. Moderna announced a deal with Lonza that could result in the production of 1 billion doses per year. This is a robust 10-year contract. The positive spin on the vaccine by Goldman Sachs equity research helped buoy the stock price and generate market volatility. The company says a phase three trial could begin as soon as the fall of 2020.
Another distribution deal came from AstraZeneca and the University of Oxford. The company and the university announced last week an agreement on the global development and distribution of the university’s potential vaccine. The plan is to produce up to 100 million doses by the end of the year. The Oxford team believes that they might be able to produce the vaccine as early as September.
A third vaccine maker, Johnson & Johnson announced in late March that they selected a COVID-19 vaccine candidate from a group of vaccine candidates they had been working on since January 2020. They announced a partnership between the Janssen Pharmaceutical Companies of Johnson & Johnson for the rapid scaling of the Company’s manufacturing capacity that could generate a global supply of more than one billion doses of a vaccine. The Company expects to initiate clinical studies of its lead vaccine candidate at the latest by September 2020.
Gilead Remdesivir
The leading candidate for a drug that will mitigate the symptoms of COVID-19 is Remdesivir from Gilead. The drug showed positive trial results and was granted emergency use authorization by the U.S. Food and Drug Administration. This will enable the broader use of remdesivir to treat hospitalized patients with severe Covid-19 in the United States. At the end of April, the European Medicines Agency announced a rolling review of Remdesivir, which enables the agency to assess data on the drug as it becomes available.
The Bottom Line
The upshot is that the trading markets are desperate for good news and each announcement brings on market volatility. The initial findings have been positive, but if one of the leading candidates fails, there could be substantial downside volatility.