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The Vaccine Investment Hypothesis, and What’s Next (AZN, JNJ, DYAI, BNTX)

The party is apparently “On” as far as the developed world’s sense of “reopening” is concerned.

But the global truth is far removed from this celebration, as less than 20% of the world’s population have had access to a vaccine. The major vaccine producers struggle with the unit economics and production dynamics to solve this problem.

Among countries with more than 1 million people, Mongolia is currently vaccinating faster than any other, administering a daily average of 1,790 doses per 100,000 people in the past seven days. The fastest rate it has achieves is roughly 3,434 doses per 100,000 people per day.

About 53% of people who have received at least one dose of a coronavirus vaccine were from high income countries, and at least 51% were from Europe and North America. Yet, still, for the vast majority of countries, far less than 10% of residents have had any access at all to an effective Covid-19 vaccine.

In other words, while the fight may seem over for people in suburban upper middle-class communities, the real battle is still just in its nascency. This has driven speculative interest in companies such as Pfizer Inc (NYSE: PFE), Novavax Inc (NASDAQ: NVAX), and Moderna Inc (NASDAQ: MRNA).

But the playing field here is likely far more tenuous at this point than it might at first appear.

With that in mind, we take a look at some of the most interesting names now defining the landscape in the Covid-19 vaccine fight, including: AstraZeneca plc (NYSE: AZN), Johnson & Johnson (NYSE: JNJ), Dyadic International Inc (NASDAQ: DYAI), and BioNTech SE – ADR (NASDAQ: BNTX).

 

AstraZeneca plc (NYSE: AZN) bills itself as a company that discovers, develops, and commercializes prescription medicines for the treatment of oncology, cardiovascular and metabolic, respiratory, gastrointestinal, neuroscience, and infection diseases worldwide.

Its marketed products include Arimidex, Casodex/Cosudex, Calquence, Faslodex, Imfinzi, Iressa, Lynparza, Nolvadex, Tagrisso, and Zoladex for oncology diseases; Atacand1/Atacand HCT/Atacand Plus, Brilinta/Brilique, Crestor2, Plendil, Seloken/Toprol-XL4, Tenormin5, and Zestril6 for cardiovascular diseases; and Bydureon, Byetta, Farxiga/Forxiga, Kombiglyze XR, Komboglyze, Onglyza, Qtern, Symlin, Xigduo, and Xigduo XR for metabolic diseases. In addition, it is a producer of a major vaccine solution for Covid-19.

AstraZeneca plc (NYSE: AZN) recently announced that it has entered into a collaboration agreement with Massachusetts General Hospital (MGH), leveraging robust data and clinical best practices to create digital health solutions that address today’s most urgent healthcare challenges. Catalyzed by the COVID-19 pandemic and a shared mission to improve care for patients with chronic illness, this novel partnership is focused on creating and clinically validating patient-centric digital health solutions and establishing a new standard of care for chronic illness management outside of a clinical setting.

According to the release, this collaboration is being led by the MGH Center for Innovation in Digital Healthcare (CIDH) and will utilize AstraZeneca’s new AMAZE disease management platform in studies for heart failure and asthma management. These first two studies will pilot AMAZE in a real-world setting with the goals of improving patient engagement, care-team communication and clinical outcomes while reducing healthcare costs.

The stock has suffered a bit of late, with shares of AZN taking a hit in recent action, down about -2% over the past week.

AstraZeneca plc (NYSE: AZN) managed to rope in revenues totaling $5.3B in overall sales during the company’s most recently reported quarterly financial data — a figure that represents a rate of top line growth of 1.2%, as compared to year-ago data in comparable terms. In addition, the company is battling some balance sheet hurdles, with cash levels struggling to keep up with current liabilities ($5.6B against $15.6B, respectively).

 

Johnson & Johnson (NYSE: JNJ) trumpets itself as a company that, together with its subsidiaries, researches and develops, manufactures, and sells various products in the health care field worldwide.

Its Consumer segment offers baby care products under the JOHNSON’S brand; oral care products under the LISTERINE brand; beauty products under the AVEENO, CLEAN & CLEAR, DABAO, JOHNSON’S Adult, LE PETITE MARSEILLAIS, NEUTROGENA, RoC, and OGX brands; over-the-counter medicines, including acetaminophen products under the TYLENOL brand; cold, flu, and allergy products under the SUDAFED brand; allergy products under the BENADRYL and ZYRTEC brands; ibuprofen products under the MOTRIN IB brand; and acid reflux products under the PEPCID brand.

Johnson & Johnson (NYSE: JNJ) recently announced the World Health Organization (WHO) and the government of Sierra Leone have begun administering the Company’s Ebola vaccine regimen as part of a WHO early access clinical program aimed at preventing further spread of Ebola in West Africa.

According to its release, the vaccine regimen, developed by the Janssen Pharmaceutical Companies of Johnson & Johnson (Janssen) in collaboration with Bavarian Nordic A/S, is being donated to the WHO by Janssen for the purposes of the early access clinical program. Johnson & Johnson also announced that its Ebola vaccine regimen has received Prequalification from the WHO, which will help accelerate its registration in countries where Ebola is a persistent public health threat and facilitate broader access to people at risk of exposure to this virus.

While this is a clear factor, it has been incorporated into a trading tape characterized by a pretty dominant offer, which hasn’t been the type of action JNJ shareholders really want to see. In total, over the past five days, shares of the stock have dropped by roughly -3% on above average trading volume. All in all, not a particularly friendly tape, but one that may ultimately present some new opportunities. JNJ shares have been relatively flat over the past month of action, with very little net movement during that period.

Johnson & Johnson (NYSE: JNJ) pulled in sales of $22.3B in its last reported quarterly financials, representing top line growth of 7.8%. In addition, the company is battling some balance sheet hurdles, with cash levels struggling to keep up with current liabilities ($24.6B against $40.9B, respectively).

 

Dyadic International Inc (NASDAQ: DYAI) continues to take strong steps as a dark horse candidate to reshape the global vaccine landscape. The company posted results and an in-depth update a couple weeks ago, and has headed off on a road show for its somewhat revolutionary new angle on the problem identified in the introduction section above.

For a little background, DYAI has a new approach that could become a better way to deal with new variants and even possibly better able to drive cheap and efficient production capable of vaccinating the world. The jewel in this new model is its proprietary process involving the C1 microorganism, which enables the development and large-scale manufacture of low-cost proteins and has the potential to be further developed into a safe and efficient expression system that may help speed up the development of biologic vaccines and drugs at commercial scales, while lowering production costs and improving performance at the same time.

Dyadic International Inc (NASDAQ: DYAI) most recently announced that the Company has entered into a collaboration with Syngene International Limited (“Syngene”), an integrated research, development, and manufacturing services company, to develop a COVID-19 vaccine candidate that can protect against the emerging variants of concern and which can be manufactured affordably, at very large scale, using Dyadic’s proprietary C1-cell protein production platform.

According to the company’s release, like the expanded partnership previously announced with Medytox, Inc., to co-develop vaccines in the Republic of Korea and multiple Southeast Asian countries, Dyadic will work with Syngene to develop a vaccine candidate to immunize people against current and future variants of the COVID-19 virus.

Mahesh Bhalgat, COO, Syngene International stated, “We look forward to our collaboration with Dyadic to initially explore the development of a COVID-19 vaccine, and to further evaluate the potential of developing a differentiated vaccine platform based on Dyadic’s proprietary C1- cell line.”

Dyadic International Inc (NASDAQ: DYAI) pulled in sales of $461K in its last reported quarterly financials, representing top line growth of 46%. In addition, the company has a strong balance sheet, with cash levels far exceeding current liabilities ($27.2M against $2.6M). That said, if the company is successful in its larger strategy, this one could jump from small-time to global leadership, suggesting that its current financial performance figures don’t really scratch the surface of the speculative opportunity in play for DYAI.

 

BioNTech SE – ADR (NASDAQ: BNTX) trumpets itself as a next generation immunotherapy company pioneering novel therapies for cancer and other serious diseases. The Company exploits a wide array of computational discovery and therapeutic drug platforms for the rapid development of novel biopharmaceuticals. Its broad portfolio of oncology product candidates includes individualized and off-the-shelf mRNA-based therapies, innovative chimeric antigen receptor T cells, bi-specific checkpoint immuno-modulators, targeted cancer antibodies and small molecules.

Based on its deep expertise in mRNA vaccine development and in-house manufacturing capabilities, BioNTech and its collaborators are developing multiple mRNA vaccine candidates for a range of infectious diseases alongside its diverse oncology pipeline. BioNTech has established a broad set of relationships with multiple global pharmaceutical collaborators, including Genmab, Sanofi, Bayer Animal Health, Genentech, a member of the Roche Group, Regeneron, Genevant, Fosun Pharma, and Pfizer. For more information, please visit www.BioNTech.de.

BioNTech SE – ADR (NASDAQ: BNTX) most recently announced that the Conditional Marketing Authorization (CMA) for COMIRNATY® in the European Union (EU) has been expanded to include individuals 12 to 15 years of age. COMIRNATY® was the first COVID-19 vaccine to receive authorization in the EU and is the first to have its CMA extended to adolescents. Distribution and administration of COMIRNATY® by the EU member states will continue to be determined according to the populations identified in the EU and per national guidance.

“Today’s extension of our COVID-19 vaccine authorization in the European Union is another critical milestone in our collective effort to broaden vaccination programs to as many people as possible,” said Ugur Sahin, M.D., CEO and Co-founder of BioNTech. “Making vaccines available to adolescents will help re-open schools and support the return to a normal day-to-day life.”

If you’re long this stock, then you’re liking how the stock has responded to the announcement. BNTX shares have been moving higher over the past week overall, pushing about 6% to the upside on above average trading volume. BNTX shares have been relatively flat over the past month of action, with very little net movement during that period.

BioNTech SE – ADR (NASDAQ: BNTX) pulled in sales of $2.5B in its last reported quarterly financials, representing top line growth of 7995.9%. In addition, the company is battling some balance sheet hurdles, with cash levels struggling to keep up with current liabilities ($1B against $1.5B, respectively).

 

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