Biopharma industry profitability in line with other R&D-heavy sectors
Even outside of election seasons, the prices drugmakers charge for medicines and the revenues and profits they rake in attract public scrutiny, much of it negative. But a new study indicates that while the biopharma industry’s profits outpace those of most sectors, they remain in line with those of industries that depend on research and development.
The study, conducted by researchers at Bentley University in Waltham, Massachusetts, and at the University of New Mexico, was published Tuesday in the Journal of the American Medical Association.
The researchers compared the profits of 35 large drug makers with those of 347 companies from the S&P 500 Index, over the period from 2000 to 2018. The overall net income margin for the drug makers was 13.7%, compared with 7.7% for S&P 500 companies, reflecting a difference of 6.1%. But when compared with companies in other sectors that depend on R&D, the difference shrank to 3.6%, and drug makers were not more profitable than technology or non-pharmaceutical healthcare companies.
Biopharma’s role in tackling coronavirus
Drug and vaccine development is a long and costly business that frequently fails to generate a profit for the companies involved. If this is widely appreciated within biopharma it probably needs repeating in light of calls – politically driven or otherwise – on the industry to “do something” about the coronavirus outbreak.
Given this harsh reality it is a minor miracle that Gilead has already managed to initiate two pivotal studies with its antiviral remdesvir. Numerous other biotech and diagnostic companies have been getting in on the Covid-19 act, EvaluatePharma shows, but in many cases enthusiastic press releases amount to empty words.
Vir, Epivax and Generex fall into the category of biotechs announcing the signing of deals which aims to develop vaccines or therapeutics which is a target for Covid-19. Of course, signing a deal is not the same as actually developing something, which will take a lot longer, but at least the effort, is there.
There are more flagrant examples of jumping on the coronavirus bandwagon: Inovio, for instance, this week trumpeted the fact that it was “accelerating the timeline” for its Covid-19 vaccine; Innovation Pharmaceuticals presented a theoretical rationale backing one of its projects; Evelo is “considering developing” another asset; and Adma Biologics apparently has some relevant IP.
Biopharma Could Outperform Volatile Market, Analyst Says
Bank of America analyst says the coronavirus’s impact on the drug supply chain has been overblown and sees biopharma as a haven during market turmoil. Bank of America analyst upgrades Amgen, downgrades Moderna.
Looking for opportunity amid the market meltdown? Take a look at biopharma, Bank of America analyst Geoff Meacham argues in a new note out Thursday.
“Despite market volatility from [coronavirus], we expect limited impact on biopharma fundamentals,” Meacham wrote.
Meacham played down the excitement over possible treatments and vaccines for Covid-19, saying that they remain months, or even a year, away.
But he also suggested that fears over the virus’s impact on the pharmaceutical supply chain could be overblown, saying that the outbreak appears to have peaked in major manufacturing regions.
In the note, Meacham updated his calls across the sector. He upgraded Amgen (ticker: AMGN) to Buy from Neutral, and added Bristol-Myers Squibb (BMY) to the U.S. 1 List, a selection of top picks.
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Heat Biologics Announces Research Collaboration with the University of Miami to Develop Vaccine Designed to Protect Against Coronavirus
Clinical and preclinical studies suggest that Heat’s gp96-based vaccines may be utilized to target COVID-19. Heat has treated more than 300 patients to date with its gp96-based therapeutic vaccines. Results from these studies together with positive outcomes in NIH and DOD-funded mouse and primate studies against SIV/HIV 1-2, malaria and zika, demonstrate that gp96 vaccines express a broad range of antigens and stimulate a robust systemic immune response, culminating in humoral and cell-mediated responses in different organs including the gut, reproductive tract, liver, and lungs.
Heat’s COVID-19 vaccine will utilize Heat’s gp96 platform to generate open docking sites for the insertion of multiple SARS-CoV-2 antigens. Heat anticipates that its novel approach should activate a potent immune response, without the disadvantages of possible genomic integration of foreign DNA or viral vector instability possible with attenuated viral vaccines. This approach is designed to induce a multi-epitope specific memory CD8 T-cell response that protects against multiple, distinct coronavirus strains across diverse human populations and against potential future mutations of SARS-CoV-2 and other coronaviruses.
Heat’s COVID-19 program emerged from the same laboratory that originally developed Heat’s gp96 platform technology, and will be developed at the University of Miami Miller School of Medicine under the direction of Natasa Strbo, M.D., D.Sc., research assistant professor of microbiology and immunology, who has spent many years advancing the gp96 platform as a vaccine against HIV, malaria, zika and other infectious diseases.