It wasn’t that long ago that people considered Moderna and Pfizer to be saviors. Their work during the COVID-19 pandemic brought on an unusual outpouring of support and goodwill toward the pharmaceutical industry and toward other COVID-19 vaccine and treatment developers like Regeneron Pharmaceuticals, AstraZeneca, and Johnson & Johnson.
The emergency phase of the pandemic was a good few years for the biotechnology industry financially speaking, too. Investment and valuations skyrocketed as generalist funders entered the space, newly reacquainted with the idea that science and medicine could keep them and their loved ones alive.
Then, thanks in large part to those drugmakers, the emergency was over. Governments began to cancel advance purchase agreements for vaccines, which had bolstered the revenues and market capitalizations of Moderna, Pfizer, and their ilk. Even though health authorities authorized and recommended booster shots, more and more people chose to forgo vaccination.
Biotech and pharma companies’ performances spiraled downward in short order.
I always like to say, ‘You think you’re done with COVID, but COVID is not done with you.’
Lawrence Blatt, CEO, Aligos Therapeutics
Global sales of Moderna’s COVID-19 vaccine, Spikevax, went from a high of $18.4 billion in 2022 to just $3.1 billion last year, an 83% decline. For Pfizer’s COVID-19 vaccine, Comirnaty, sales went from $37.8 billion in 2022 to $5.4 billion last year, an 86% decline. Pfizer’s antiviral Paxlovid suffered a similar trajectory. Both companies have laid off employees in the past year, and their stock prices have dwindled.
And those are the success stories. Novavax, whose late-entering COVID-19 vaccine was authorized in the US in mid-2022, was on the verge of bankruptcy last year until Sanofi stepped in and agreed to codevelop new shots.
Saving the world, it turns out, is a double-edged sword. Now that most of the world has had COVID-19 and survived, the disease is no longer viewed as a threat—or a viable market.
Infectious disease experts say this is par for the course. Scientists and investors can mobilize quickly when there’s an emergent threat, but in the absence of such an emergency, interest tapers off.
“What happens in virology is the interest in viruses waxes and wanes with epidemics and pandemics. That’s really not good for society, because really, what we should be doing is having antivirals developed ahead of these pandemics,” says Lawrence Blatt, CEO of the antiviral developer Aligos Therapeutics. “Investors are not going to fund a COVID drug now, and Big Pharma is not going to partner on a COVID drug now . . . but elderly patients, immunocompromised patients, are still at risk for bad outcomes from COVID.”
Aligos is among the handful of drug manufacturers that have stayed in the COVID-19 space. In the absence of a global health emergency, Blatt and his contemporaries are figuring out what corners of the market remain.
“From a social construct, people wish to say it’s over, and that is because it has shrunk from something that might have been an extinction event to something that, I guess, just killed more Americans last year than breast cancer,” says Marc Elia, chairperson of the board of the COVID-19 antibody developer Invivyd. “It would be delightful if it were over. But like many really upsetting facts of nature, from HIV all the way down to mosquitoes, things we don’t like don’t just go away because we wish they would go away.”
Blatt says, “I always like to say, ‘You think you’re done with COVID, but COVID is not done with you.’ ”
Shots against COVID-19
Moderna and Pfizer, makers of the two most common COVID-19 vaccines in the US, have both watched their overall valuations decline since the emergency days of the pandemic.
Source: PitchBook.
Limited options
Broadly speaking, there are three pharmaceutical interventions for COVID-19: vaccines, antivirals, and monoclonal antibodies.
Vaccines have long been considered the first line of defense in the US. Antivirals and monoclonals are secondary interventions, meant for people who are more likely to be hospitalized or have other complications, usually due to age or underlying conditions.
Paxlovid, for instance, is approved only for adults “at high risk for progression to severe COVID-19, including hospitalization or death,” per its US Food and Drug Administration (FDA) prescribing information. Invivyd’s monoclonal antibody, Pemgarda, is authorized only as a pre-exposure prophylactic for adults who are moderately or severely immunocompromised and can’t mount sufficient immune responses to COVID-19 vaccines.
Just a few years ago, people in those categories had more options, and new drugs seemed to be on the way each day. Regeneron, Eli Lilly and Company, AstraZeneca, and GSK all had monoclonal antibodies authorized for emergency use in the US.
But SARS-CoV-2 is adept at mutating. The virus managed to change the shape of its proteins just enough to evade the antibodies, and one by one, the FDA revoked their authorizations.
Regeneron, Lilly, and GSK don’t have new COVID-19 treatments in their clinical pipelines anymore. Vir Biotechnology, which had codeveloped a monoclonal antibody with GSK, changed business strategies entirely and now focuses mostly on cancer and hepatitis B. Only AstraZeneca is working on a new COVID-19 monoclonal antibody, called sipavibart, which was recently authorized in Europe under the name Kavigale.
Meanwhile, relatively few biotech or pharmaceutical companies are developing new antivirals compared with earlier in the pandemic. Gilead Sciences abandoned development of the antiviral obeldesivir as a COVID-19 treatment after it failed to alleviate symptoms as quickly as researchers hoped in a large Phase 3 trial. A spokesperson confirms there are no plans to revive the COVID-19 program, although obeldesivir is being developed as a treatment for respiratory syncytial virus (RSV). Likewise, AbbVie shelved a Phase 1 antiviral called ABBV-903 for COVID-19 treatment within the past year.
Insilico Medicine and Enanta Pharmaceuticals each decided to stop investing their own resources into the antivirals ISM3312 and EDP-235, respectively, after completing early- and midstage clinical trials. The antivirals will move forward only if another drugmaker licenses or agrees to codevelop them.
“The market for antivirals is generally slow since the pandemic,” Insilico CEO Alex Zhavoronkov says over email.
Three antivirals are available in the US today: Pfizer’s Paxlovid, or nirmatrelvir with ritonavir; Gilead Sciences’ Veklury, or remdesivir; and Merck & Co.’s Lagevrio, or molnupiravir. All come with their own drawbacks. Paxlovid interacts negatively with a slew of common medications for diseases like arrhythmia and migraine, making it difficult for people with those conditions—many of whom are at a higher risk for COVID-19 complications precisely because of those conditions—to take it. Veklury has to be administered intravenously, and Lagevrio isn’t as effective as Paxlovid is, making it a last line of treatment.
Enanta CEO Jay Luly is hopeful that it’ll soon become clear to potential partners that EDP-235 has a market, in part because of these drawbacks.
“We firmly believe there is a need for a conveniently-dosed, safe and effective once-daily oral treatment with fewer drug-drug interactions (DDI) and an improved tolerability profile (doesn’t taste bad),” Luly says by email. “There is a very low uptake of boosters, leaving most of the population vulnerable to infection. The ultimate market for COVID treatments remains to be determined, but an improved antiviral with less DDI complications and better tolerability would certainly broaden the current multi-billion-dollar market.”
Making a business case
Biologics start-up Generate:Biomedicines had originally planned to develop a monoclonal antibody as a pre-exposure prophylactic for COVID-19. As the pandemic evolved, “that probably didn’t make sense anymore,” says executive vice president of research and development Alex Snyder, so the company pivoted to looking at immunocompromised people as a target market.
Generate now has two antibodies in early-stage development for COVID-19, but Snyder says that exactly how the company would commercialize them, assuming they succeed in trials, is “in exploratory phases.”
“COVID is sort of a moving target from every perspective—biologically, clinically, politically, geographically. How do you develop a drug in a space like that?” she says. “The clinical and commercial path forward for a COVID monoclonal antibody is something that we are thinking through carefully.”
Financial whiplash
Pharmaceutical companies' COVID-19-related revenue has dropped off sharply in the last 2 years.
Source: US Securities and Exchange Commission filings.
Generate is well-funded by private investors; the start-up announced a $273 million series C financing round in 2023. But other drug developers with COVID-19 programs have had to rely on public and philanthropic funding.
InflaRx, another biologics firm, has a monoclonal antibody called Gohibic, or vilobelimab, that’s authorized in the US for COVID-19 patients who’ve recently been put on a ventilator or artificial life support. Originally, cofounders Niels Riedemann and Renfeng Guo had hoped to develop treatments for acute respiratory distress syndrome (ARDS) in people with sepsis, but they pivoted to COVID-19 because competitors had failed in similar endeavors.
The rest of InflaRx’s pipeline is made mostly of drug candidates for inflammatory skin diseases. Riedemann says that’s a strategic choice.
“We are fostering the scientific development where we can without pouring in more financial resources,” he says. “That’s because a small company needs to do that: needs to focus on where the main business is. That is clearly immuno-dermatological indications for us right now.”
To develop Gohibic further, InflaRx is using government grants. The Center for the Biomedical Advanced Research and Development Authority (BARDA) tapped the company last year for a midstage study testing the drug in ARDS caused by a multitude of triggers, not just COVID-19.
Aligos has funded its Phase 2 antiviral, ALG-097558, almost entirely with grants from organizations including the US National Institutes of Health (NIH) and the Agile Initiative, which is backed by the Wellcome Trust, the UK’s Medical Research Council, and UK Research and Innovation.
“Investors want to make money. Big Pharma wants to make sales. Having these antivirals is a public good, in my opinion. We need this for society. But in a free-market economy, who pays for that, right? That’s the issue,” says Blatt, Aligos’s CEO. “It has to be government.”
Big government
It’s not clear that the US federal government will want much to do with COVID-19 going forward.
Federal underinvestment began under President Joe Biden’s administration. Biden launched a $5 billion initiative called Project NextGen in 2023. The idea was to leverage BARDA to fund next-generation vaccines and new monoclonal antibodies. As of last July, BARDA had allocated a little over half of the Project NextGen funds. NextGen has since expanded beyond COVID-19, awarding grants for pandemic influenza and H5N1 vaccines as well.
Left out of Project NextGen were antivirals. They were supposed to be covered instead by a program that funded Antiviral Drug Discovery (AViDD) Centers for Pathogens of Pandemic Concern; the NIH initially promised $577 million in 2022. The NIH allocated money for the first 3 years and said more funds would come later, but they never did, and in 2023, Congress clawed back unspent COVID-19 pandemic relief funds, leaving the AViDD centers out to dry. The research centers will run out of funding come May.
We’re going to have to kind of configure ourselves for the long run in this and other pathogens or viruses.
Marc Elia, chairperson, Invivyd
Drugmakers are skittish about the potential for additional threats to their businesses under President Donald J. Trump’s administration. Robert F. Kennedy Jr., the new secretary of the US Health and Human Services (HHS) department, has previously suggested that the NIH take a “break” from research on infectious diseases, focusing instead on chronic conditions. The HHS has already paused an ongoing trial of one next-generation COVID-19 vaccine, made by the company Vaxart.
“I’m a little bit worried. We have a new administration coming in, and whether or not there’ll be funding for COVID is not known,” Blatt says. “I don’t know what’s going to happen.”
Meanwhile, COVID-19 continues to be a threat for people like Elia of the Pemgarda developer Invivyd. Elia is among the hundreds of millions of people around the world who were “unlucky enough,” as he puts it, to come down with the postviral illness known as long COVID, a constellation of symptoms that range from debilitating fatigue to serious blood circulation issues.
“What we’re all going through, I believe, is now a transition from this trauma of a pandemic,” Elia says. “We’re going to have to kind of configure ourselves for the long run in this and other pathogens or viruses.”
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Elia and his team at Invivyd recently submitted paperwork to the FDA to expand Pemgarda’s emergency use authorization. Currently, the drug is authorized as a pre-exposure prophylactic for people with compromised immune systems. Invivyd made the case that the drug should also be used to treat COVID-19 in immunocompromised people “who have no alternative therapeutic options” once they’ve come down with the illness.
On Feb. 24, Invivyd disclosed that the FDA had declined its request. The agency was “unable to reasonably conclude that the known and potential benefits of pemivibart . . . outweigh the known and potential risks,” according to a press release from the company about the decision.
Elia is sympathetic to the FDA, acknowledging that the agency has been “navigating all different sorts of uncertainty” for the past 5 years. But he’s still frustrated by the lack of options for people who can’t mount a sufficient immune response to knock off SARS-CoV-2—a population that he expects will only grow as more people are repeatedly infected with the virus.
“Pemgarda is showing up again to work today for the job of prophylaxing those immunocompromised persons who are in need,” Elia says. “That’s not exactly a small economic opportunity or medical opportunity. We just have to continue executing.”
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