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Latest Covid Study Pause Puts Stock Rallies at Risk for Other Vaccine Makers

Latest Covid Study Pause Puts Stock Rallies at Risk for Other Vaccine Makers

Study and trial pauses can be a standard operating procedure in drug development, yet it could put the triple- and quadruple-digit rallies for some biotechs at risk.

With more than 40 trials testing Covid-19 vaccines in humans and roughly 150 more in earlier preclinical stages of testing, according to the World Health Organization, a pause in some studies such as Johnson & Johnson’s trial is to be expected. Trying to compress a timeline that usually takes years into a few months makes the process especially difficult, and safety is paramount since vaccines are mostly given to healthy people.

Pfizer Inc. and partner BioNTech SE’s late-stage results are expected as soon as this month and it’s thought Moderna Inc.’s data will follow closely behind. Germany-based BioNTech shares have swelled more than 160% this year while Moderna has quadrupled. AstraZeneca Plc dropped out of the lead after trials were halted in September when a study volunteer developed a possible neurological problem. While Astra’s trials in the U.K., South Africa and Brazil have resumed, its U.S. study remains halted.

Latest Covid Study Pause Puts Stock Rallies at Risk for Other Vaccine Makers

A mid- to late-stage study from Inovio Pharmaceuticals Inc. was put on a partial hold last month after U.S. regulators raised questions about a delivery device used in the shot.

Adam Barker, an analyst with Shore Capital, said after J&J’s pause Tuesday: “Trial halts are fairly common and although we don’t know the exact reason for this stop, the majority of safety incidents aren’t usually related to the vaccine.”

“There will be very detailed checks now on what’s happened and it’s unpredictable when it will restart, he said. “But if there is a vaccine-related issue, it’s very serious.”

Pause or Halt

There’s a distinction to be made between a trial being halted and a pause, Cowen analyst Yaron Werber wrote in a client note. A pause is implemented by the sponsor of a study and “is a standard component of a clinical trial protocol,” while a halt is a requirement by a regulatory agent like the Food and Drug Administration. “Companies typically do not communicate study pauses publicly,” he said.

That’s a sentiment backed up by Bloomberg Intelligence analyst Sam Fazeli. “Dose pausing in trials is relatively common but we don’t hear about them much given they don’t have this level of public scrutiny,” Fazeli said in an email. There will be other trial pauses, “especially with ultramodern vaccines,” he said.

With J&J’s U.S. vaccine study on hold, that leaves Pfizer and Moderna’s leads intact. Moderna climbed 4% on Tuesday while BioNTech added 5%. Novavax Inc., a smaller peer still in the race, jumped 7.5%, and the shares have rocketed 30-fold this year.

Pfizer and Moderna are developing vaccines using messenger RNA, a relatively new and untested technology. AstraZeneca and J&J’s candidates use adenoviral technology and are derived from engineered viruses.

And it’s not just vaccines, on Tuesday Eli Lilly & Co. said a study of its antibody treatment was paused over a possible safety concern. President Donald Trump has been touting antibodies as a cure for Covid-19 after being treated with an antibody cocktail from Regeneron Pharmaceuticals Inc. The nation’s infectious disease expert Anthony Fauci has said the treatments could provide a bridge to a vaccine.

Regeneron’s stock has rallied more than 60% this year while Vir Biotechnology Inc., which is testing antibodies with GlaxoSmithKline Plc has seen its stock more than triple.

©2020 Bloomberg L.P.