Covid-19 Vaccine Expectations May Be Getting Ahead of Science
A French National Centre for Scientific Research (CNRS) researcher holds up a test tube containing cells to be infected with Covid-19 during coronavirus vaccine research work inside the Pasteur Institute laboratories in Lille, France. (Photographer: Adrienne Surprenant/Bloomberg)

Covid-19 Vaccine Expectations May Be Getting Ahead of Science

(Bloomberg) --

A recovering U.S. stock market may be pricing in too much optimism over the near-term potential of a vaccine to prevent the spread of the novel coronavirus.

An Oxford University scientist went so far as to tell The Times earlier this month that a vaccine could be ready by September, well ahead of guidance from U.S. agencies that have suggested it is likely to take a year or more.

“Such comments make having a vaccine and having one in this timeframe seem a foregone conclusion. Such a conclusion then distorts policymakers’, investors’ and developers’ decisions and expectations,” SVB Leerink’s Geoffrey Porges said in a research note.

High expectations have caused the stocks of companies developing vaccines to surge. Shares of the U.S. leader, Moderna Inc., have more than doubled since late February, as have smaller peers like Novavax Inc. and Inovio Pharmaceuticals Inc. Even before the coronavirus outbreak, none of these companies had successfully brought a product to the market. Pfizer Inc.-partnered BioNTech SE surged Wednesday after starting a vaccine trial in Germany.

‘Very Ambitious’

Porges isn’t alone in trying to tamp down the enthusiasm. It typically takes several years to develop a vaccine, so 12 to 18 months looks “very ambitious,” Severin Schwan, Roche Holding AG’s chief executive officer said Wednesday on Bloomberg TV.

Covid-19 Vaccine Expectations May Be Getting Ahead of Science

While investors may assume Moderna will be the fastest, we won’t know for at least another 12 months if the biotech’s messenger RNA vaccine is safe as well as effective, said Mark Poznansky, an associate professor of medicine at Harvard Medical School, and director of the Vaccine and Immunotherapy Center at Massachusetts General Hospital.

The problem, as outlined by Porges, is that epidemiologists as well as economists appear to be planning for a vaccine coming down the pipeline in as little as six months, but a broadly used vaccine is likely to take two to three years in his “most optimistic” estimation.

Covid-19 Vaccine Expectations May Be Getting Ahead of Science

Porges, besides his MBA from Harvard Business School, also has a bachelor’s degree in medicine from the University of Sydney. Before moving to Wall Street, he rose through the ranks at Merck & Co. where he said he was responsible for business strategy and product planning and commercialization for the drugmaker’s vaccines.

While some vaccines have been earmarked for faster development like Moderna’s or Johnson & Johnson’s adenovirus-based one, that speed could comes at the risk of safety or efficacy liabilities down the road, Porges said.

Herd Immunity

Even if an approved, effective vaccine is available in a year, it’s more likely it will be given to patients and health-care workers who face greater risk from the disease and “it would still take several years to confer sufficient “herd immunity” to prevent endemic spread of Covid-19,” he said.

Vaccine researchers are aware of the shortcomings. “We don’t yet fully understand what constitutes a protective immune response to the virus or what precisely a vaccine needs to do to achieve that” Poznansky said.

But with more than 70 vaccines in development and despite the things scientists don’t yet know about the virus, Poznansky is hopeful on the expedited timelines.

“We’ve got a lot of vaccine shots on goal being lined up across the global scientific community, we’re hoping that by chance some of them might actually be able to invoke the immunity that we need to protect people from infection and its serious consequences,” he said.

Poznansky is working with closely held biotech Voltron Therapeutics on a Covid-19 vaccine targeting T-cells, and the experimental product is moving into animal testing.

Porges’s warning comes on the heels of a more than 20% gain from March lows for the S&P 500 Index.

Still the analyst wasn’t all gloom and doom.

“Social distancing, the emergence of antivirals, the increase in viral testing capacity, the development of immunoassays, and the increase in understanding of the pathophysiology and immunology of the disease have contributed to an improving outlook about the pandemic,” he said.

©2020 Bloomberg L.P.

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