Before the Covid-19 pandemic, most of us had never heard of mRNA vaccines – and for good reason. Although scientists had been experimenting with the technology for decades, it had yet to make it out of the lab and into widespread medical use. Now, roughly three years after the virus was first detected, more than 70 per cent of the global population has been vaccinated against it.
Two of the most widely-used jabs are made by Pfizer (US: PFE), in collaboration with BioNTech (US: BNTX) and Moderna (US: MRNA). Both formulations use genetically-engineered messenger RNA to encode key proteins that are found on the surface of the coronavirus. Once this mRNA enters human cells, they start to make the protein, which in turn mobilises the immune system against the virus.
It’s possible to use mRNA to trigger this kind of immune response to other bodily invaders, including cancer cells and influenza. However, the Covid vaccines are still the only commercialised messenger RNA products available – for now. Companies across the biopharma industry, from privately-held startups to blue-chip drugmakers, are working to bring more mRNA-based immunisations to market. Whether these therapies ultimately prove profitable depends largely on their safety and effectiveness in new iterations.
One of mRNA’s key advantages, and one of the reasons the Covid jabs were developed so quickly, is that it’s relatively easy to create a vaccine once researchers know the sequence of the viral protein they’re targeting. The sequence of the novel coronavirus that emerged in late 2019 was already available by January 2020 – and vaccine candidates from Pfizer-BioNTech followed rapidly.
“Within a matter of days, there were mRNA constructs that would code for the ‘spike’ protein. That spike protein in and of itself was a very good antigen, in that it’s everywhere on coronavirus,” says Sebastian Skeet, senior healthcare sector analyst at investment research firm Third Bridge. “If you look at RSV, by contrast, it took scientists a long time to figure out which antigen, i.e. which protein, they had to focus on and develop a vaccine against.”
The respiratory syncytial virus (RSV) is one of the last common respiratory bugs for which there is no available vaccine. Moderna is currently working on an mRNA-based RSV jab aimed at people aged 60 and older, though Pfizer looks likely to be first on the market with its conventional RSV vaccine, which could receive FDA approval by the middle of next year. Not to be outdone, Moderna is also developing a three-in-one vaccine against Covid-19, flu and RSV, though this is only in the very early trial stages.
“I don’t necessarily think we’ll have a pan-respiratory vaccine anytime soon,” says Skeet. "But the RSV market is sized at over $10bn. Imagine adding that on top of Covid, which is generally considered to be endemic now, and influenza A and B. It’s reasonable to assume this would be a very large commercial opportunity."
Also on the horizon is a skin cancer vaccine made by Moderna, in collaboration with Merck (US: MRK). Promising phase II trial data for the vaccine, released as the IC went to press, sent Moderna shares 20 per cent higher this week. The companies’ partnership predates the pandemic: Merck paid the biotech outfit $200mn upfront in 2016 to develop a series of personalised mRNA cancer vaccines. Like Moderna, BioNTech’s pre-pandemic interest was also in cancer vaccines – and it now has a number of different products in early-stage trials.
However, there is still much to be learned about the safety and efficacy of these vaccines, meaning it is perhaps too early for shareholders to pick a single horse in the mRNA race. “I don’t think that success in Covid clearly translates into success in, for example, cancer,” says Akash Tewari, a biotechnology research analyst at Jefferies. “That biological question is very, very different.”
For now, sales of coronavirus vaccines will continue to determine the revenue trajectories of both Moderna and BioNTech. Legal trouble is also brewing among the pandemic’s mRNA pioneers, with Moderna suing Pfizer and BioNTech in August for alleged patent infringement. In early December, the pair filed a countersuit, demanding a jury trial and roundly denying any infringement took place. The companies’ respective share prices have not moved significantly in reaction to the disputes.
Ultimately, there is no special hurry for either Moderna or BioNTech to bring new blockbuster products to market, even though Covid jab sales are waning. The cash reserves accumulated in the pandemic give them both substantial runway to develop new medicines (see chart). As trial data emerges, further partnerships with big pharmaceutical companies are all but inevitable. For now, mRNA’s first movers can pause to plot their next steps.
“How many times have you seen a company that doesn’t have to raise money and has a tonne of cash and the ability to carry out an R&D strategy... without the capital constraints you’d see historically?” Tewari comments. “That’s a very unique moment.”
