As Covid-19 upends the world, people are putting their faith in the biopharma industry to save us from this crisis. Retail investors are pouring into biopharma stocks, and when any data are released on Covid-19-related vaccines or therapies, entire markets move — even if the news from the company isn’t entirely straightforward.
Many biopharma companies (especially American ones) are benefiting from the Covid-19 pandemic.
While the Dow Jones is down 14% so far this year, the XBI biotech index is up 12% for the year and at all-time highs. The prices of some biopharma stocks have more than doubled this year. Vir Biotechnology (VIR) is up 168%, Moderna (MRNA) is up 253%, and Inovio (INO) is up 327% year to date.
Five biotech companies that are developing Covid-19 vaccines or therapeutics have gained a combined $57 billion in market capitalization this year.
It’s understandable for companies to provide frequent updates given the massive public interest in what they are doing, but they must do so responsibly and with full transparency. When the world is depending on new vaccine or treatments, biopharma companies are under unprecedented scrutiny.
The way some biopharma companies have handled Covid-19 is disappointing, to say the least.
Gilead, for example, is repurposing an antiviral drug, remdesivir, as a treatment for Covid-19. There is a solid mechanism of action supporting its use against SARS-CoV-2, the virus that causes Covid-19. The company, however, has been anything but transparent with the clinical data of remdesivir. On April 29, there were three press events around remdesivir: Gilead’s press release of about the company’s Phase 3 SIMPLE study, Dr. Anthony Fauci’s announcement at a White House press briefing around Covid-19, and Gilead’s press release that the company was “aware of positive data” emerging from a remdesivir trial being conducted by the National Institute of Allergy and Infectious Diseases (NIAID), which Fauci leads.
I admire Fauci more than almost any other scientist. He is one of the top 50 most cited researchers of all time and has been an excellent voice of reason to the White House. But his releasing remdesivir data on live television without peer-reviewed or published data is frankly irresponsible when any hint of Covid-19 data moves markets. Only top-line data were released, leaving us wondering what the full dataset looked like.
Fast forward to 6 p.m. on the Friday before Memorial Day. That’s when the New England Journal of Medicine published the results of NIAID’s ACTT-1 trial of remdesivir in the U.S. and nine other countries. While the data are certainly encouraging and there seems to be a clinical benefit to remdesivir, the full dataset raises important questions: There seems to be no benefit in patients on mechanical ventilation or ECMO, and the mortality benefit is not statistically significant.
Companies usually release information they’d rather people not know about late on Friday afternoons, ideally before a holiday weekend.
When STAT’s Adam Feuerstein asked a NEJM spokesperson about the timing of its publication, she replied:
I asked NEJM spox to explain the Friday 6 pm release of the remdesivir study. Her response is below. pic.twitter.com/WjNGyUv7sH
— Adam Feuerstein (@adamfeuerstein) May 22, 2020
Taking that response at face value, there’s little additional information from Gilead beyond a brief statement by the company on Friday. Despite the FDA authorizing emergency use of remdesivir, there has since been significant confusion around drug supply, distribution, and — yes — data. So why publish the results on a holiday weekend?
Then there’s Moderna. After receiving $483 million to develop a vaccine from the Biomedical Advanced Research and Development Authority, a research arm of the U.S. government, the company’s share prices have risen 253% year to date (a whopping $20 billion increase). The company released top-line data saying that eight healthy volunteers developed neutralizing antibodies against the virus. While that seems like good news, many questions remain, especially around the safety and tolerability of the vaccine. Moderna has no product on the market and has dropped or failed a number of its candidates. So should we really trust this press release at face value?
Following the announcement, Moderna immediately raised a whopping $1.34 billion of capital, with its shares trading at all-time highs. Meanwhile, Moderna’s CMO and CFO sold a whopping $30 million of the company’s stock last week.
We have yet to see the full results, though Fauci has indicated we should expect to see data in a peer-reviewed journal sometime soon.
A Chinese company, CanSino Biologics, offers a good example of biopharma transparency. It released data on Friday, May 22, from a Phase 1 trial of its in-development vaccine via publication in the Lancet. While the data raised a few questions, such as about preexisting immunity against the vector, it was transparent and offers hope as another vaccine candidate. No press conferences, no confusing press releases, no top-line look — just peer-reviewed data in one of the world’s best journals. That’s how it should be done.
Moving forward, we need more responsible reporting and transparency from all players in the war against Covid-19.
- Biopharma companies need to avoid press releases to pump up their stock.
- The NIH should work with companies on releasing data to the public.
- Executives with conflicts of interest to industry shouldn’t be heading the government’s response for vaccine development.
- Full data should be published in a journal before the FDA grants authorization for drugs.
At the end of the day, biopharma companies have gained enormous value, with just five companies alone gaining more than $50 billion in value from these practices — and we still don’t have a vaccine or effective therapy for Covid-19.
I believe the biopharma industry will create important and effective treatments for Covid-19. The industry is innovative and solves problems. But while millions of people have lost their jobs, biopharma companies should not be engineering press releases to put billions of dollars in their pockets.
While we need speed of looking at the data, now is not the time to abandon peer review and robust data transparency.
Travis Whitfill is a venture capitalist, a health policy researcher at Yale, a graduate researcher at the UCL Institute for Innovation and Public Purpose, and a senior analyst at an equities research firm that has a “long” recommendation on Gilead and “short” recommendations on Moderna and Vir Biotechnology.