The Broad View
The development of COVID-19 vaccines is a true marvel of medical science. Devised, created, tested and manufactured within months, they have been released to the public years faster than any comparable drug.
In the most recent webinar in our Explorations series, Capital Group Private Client Services equity portfolio manager Cheryl Frank, who also covers health care services as an analyst, sat down with analyst Laura Nelson Carney, who covers pharmaceutical and biotechnology companies in Europe and Asia and has a doctorate in neuroscience.
They discussed the science behind the COVID-19 vaccines, potential applications and other breakthroughs that could be coming in the years ahead. The following is an edited version of their conversation.
Cheryl Frank: The new COVID-19 vaccines came so much more quickly than other such medicines have. What’s changed?
Laura Nelson Carney: It’s not an exaggeration to say that the COVID-19 vaccine is one of the greatest scientific accomplishments of our lifetimes. These first-generation vaccines were developed faster and with higher efficacy than anyone hoped for.
Real-world effectiveness shows they’re making a big difference in the places with the highest rates of vaccine rollout. Global manufacturing capacity is also larger than we would have thought possible a year ago: 13 billion doses of vaccine will be made this year.
Frank: Scientists have been trying to develop therapies with messenger RNA, or mRNA, since the 1990s. The vaccines that we’re most familiar with are made from inactive viruses, like the chickenpox vaccine that I received when I was a kid. You inject them, and they teach your body to react to that virus.
But in a messenger RNA vaccine, what we’re doing is injecting the body with mRNA that teaches your body to create that same spike protein that exists in COVID-19. That spike protein circulates in your body, and your body learns to create an immune response to it.
The problem with the early mRNA therapies was that they were destroyed by the immune system.In 2005, scientists found a way to tweak this so that they wouldn’t trigger an immune response.
Nelson Carney: That has been one of the most important barriers, and the reason that all the early attempts failed: mRNA is exquisitely unstable outside the body. When exposed to air, it degrades almost immediately. So figuring out a way to deliver carefully designed pieces of mRNA into our cells was very difficult.
The solution was eventually to use little envelopes of fat called lipid nanoparticles. The early generations, to remain stable, need to be stored at colder than normal freezer temperatures, and still have quite a few restrictions from a storage perspective. Future generations may be able to overcome that, too.
Frank: With the vaccine being offered to everyone, how much longer will it be before offices and schools reopen?
Nelson Carney: Everything I say is prefaced by “It depends where you live.” Office reopening varies widely, country by country, state by state, company by company. In the U.S., we can expect many companies will bring back most or all of their staff this summer, with a number of extra precautions.
School reopening is another emotive and very difficult topic. It will vary widely by location and will not be tied to vaccinating kids. In most places, schools will be open by the fall, if not well before.
I’m an American living in the U.K. and trying to figure out how I can get back to see my parents in the U.S. for the summer with my husband and two kids. Currently, the U.K. rules are that you will be fined £5,000 if your trip is deemed to be a vacation and not for an essential purpose. My husband is Australian, and it looks like it’s going to be impossible to visit his family until 2022.
Frank: What have we learned from this period of rapid study and innovation? Is this going to help us develop vaccines faster in the future?
Nelson Carney: We hope so, but it won’t be possible to develop drugs again at this breakneck speed without the same level of breakneck spending to make it happen. Developing vaccines this quickly and getting them from virus sequencing to injection into the arms of hundreds of millions in just over a year is unprecedented.
We hope that some of these lessons will help us be much more ready when the next pandemic strikes. The mRNA vaccine platform allows us some plug-and-play optionality. You can change the sequence to encode a protein for another virus and have another vaccine very quickly. That’s the reason that these companies are able to make new variant versions of their vaccine in six weeks.
Many people are asking the question, “Well, if we can develop this vaccine so fast, why can’t we put in the same degree of effort and cure cancer and other life-threatening illnesses?” And the answer is that it isn’t so easy. These are difficult diseases to cure. And we have been trying for many years.
I think a few factors contributed to why we were able to do this. First, billions of dollars of upfront government funding allowed companies to do many different steps in parallel that they would normally do in sequence. Second is building on decades and decades of basic research funded by the government.
Frank: COVID-19 was really unique in many ways. It is a highly contagious disease, which was highly prevalent in certain regions and usually shows up within about a week of exposure. So it’s quickly clear whether or not a vaccine is effective. It’s the opposite of something like Alzheimer’s, which can take 10 to 20 years to read out because it’s a slow-moving disease.
Nelson Carney: Let me ask you, Cheryl, has the pandemic changed how we think about delivering health care?
Frank: I think we rapidly advanced the availability and adoption of several home-based tools. Telehealth is the one that I think we hear about the most, but there are a lot of other tools for managing and helping people in the home so they don’t have to come into a medical setting.
And I think, like a lot of other technologies, COVID-19 accelerated these services by about three to five years. It took some work from the federal government. They had to relax some regulations around privacy and in-state position certification, which increased the accessibility of telehealth appointments. And insurance carriers changed their benefit designs to waive copays and to make them more available. I think telehealth is going to be a permanent fixture of the way we deliver care going forward. And we just massively increased the acceptance of it.
The other thing that builds on telehealth is the innovation and acceptance of digital-first care models. During this period, we saw big funding going into companies that use either an app, as a front door to a medical system, or remote patient monitoring for things like blood glucose, blood pressure, weight, etc. The idea is that, instead of first stopping in the doctor’s office, your first stop would be an app. You’d have a care team that’s digital, and maybe the first interaction would be via telehealth, and that would help you decide your next step.
Laura, how are other countries using this new medical technology?
Nelson Carney: A company called BeiGene in China got the first U.S. FDA approval based almost entirely on clinical trial data generated in China. It’s a blood cancer drug called Brukinsa. Another company, Hutchison China Meditech, will likely get an approval this year for a neuroendocrine tumor drug.
But the category that has the potential to be the most disruptive is in immuno-oncology. We have seen the first Chinese PD-1 inhibitor filed for approval in the U.S. only a few weeks ago. This is the same category as Merck’s drug Keytruda. This is a $50 billion market. The consensus peak sales for Merck’s drug are between $25 billion and $30 billion for just this drug. The patent doesn’t expire until 2028, but there are four other companies hot on the heels, planning to also file in the U.S.
We have made multiple investments in both emerging Chinese biotech companies and the multinational companies with smart China strategies. The role that China plays in the global pharma industry, both as an end-user market and also as a source of globally relevant innovation, is only going to increase in the future.
Frank: What are some potentially disruptive innovations in health care that could come in the next decade?
Nelson Carney: Using cells and genes as medicines. We’ve made first steps. We have a handful of cell and gene therapies that are approved. They appear to confer functional cures, which is great, but they also have a lot of challenges; are complicated and difficult to make and very, very expensive; and can only be used in very certain types of diseases. This will change.
Cell therapy is like a transplant with a gene-edited version of cancer-fighting T cells. We have four cell therapies approved and 10 gene therapies approved in the U.S. So far, cell therapies are only used for blood cancers, but that may change in the future. The T cells are like assassins for hire for your immune system. They can be modified to better find and kill cancer cells.
Gene therapy is a way to modify a person’s genes to treat a disease in one of a few ways. You can replace a disease-causing faulty gene with a healthy one or switch off a disease-causing gene that’s not functioning properly. So far, all of our first gene therapies have been developed for very rare monogenic diseases, meaning diseases that are entirely driven by a mutation in just one gene. And they’re very expensive, up to $2 million.
The next step will be to move into more common diseases, using these approaches to cure diseases caused by missing or broken proteins. But looking further beyond, eventually we will hope to blend these two concepts to be able to repair and control genes inside of different cells in the body to be able to replace any cell in the body that is broken, dysfunctional or missing, and do it in a tissue-specific way.