Stock Market Analysis

Is This Stock On Its Way to Making a COVID-19 Vaccine Obsolete?

This biotech company is investigating an already successful product — now to be tested as a nasal spray.

This article originally appears on The Motley Fool, written by Adria Cimino.

Coronavirus vaccine makers have garnered much attention this year. That’s because the investors and medical professionals alike believe that vaccination is a good way to halt the spread of the coronavirus put an end to the pandemic. Today, 13 vaccine programs are involved in phase 3 testing. And a U.S. regulatory advisory panel last week voted in favor of Pfizer‘s (NYSE:PFE)investigational vaccine — paving the way for an emergency use authorization (EUA) on Friday, Dec. 11. Widespread vaccine distribution is — hopefully — on the horizon.

There is a company, however, that is working on coronavirus disease prevention, but not by way of a vaccine. I’m talking about Regeneron Pharmaceuticals (NASDAQ:REGN) and its investigational antibody cocktail for the prevention of COVID-19. But something even more exciting may be further down the road. Up until now, researchers have administered the cocktail through infusion. Now, Regeneron plans on testing the ability of the cocktail to be administered as a nasal spray for coronavirus prevention. Could this one day make the coronavirus vaccine a thing of the past? Let’s take a closer look.

An EUA for antibodies

Regeneron’s antibody cocktail has already proven itself to a certain degree. The U.S. Food and Drug Administration last month granted the cocktail an EUA. The authorization is for mild to moderate COVID-19 cases in patients ages 12 and older who are at risk of developing severe illness. The company’s research so far shows the cocktail works best early in the illness. It also is most effective when patients haven’t yet mounted an immune response or when patients show a high viral load. Regeneron continues to study the cocktail in phase 2/3 trials for hospitalized and non-hospitalized patients.

But the cocktail may also be a powerful tool when it comes to prevention. The company is studying it in a phase 3 trial for those most at risk — such as a household contact of a COVID-19 patient or a frontline healthcare worker. So, how does an antibody cocktail work compared to a vaccine? Vaccines traditionally introduce a weakened form of virus into the body to stimulate an immune response. With antibodies, the body doesn’t have to mount its own immune response. Instead, the antibodies administered will act to fight the virus.

Gene therapy techniques

Now, Regeneron and the University of Pennsylvania are looking to use gene therapy techniques to create an antibody cocktail nasal spray. The idea is for an adeno-associated virus vector to deliver the sequence of the cocktail into nasal epithelial cells. The research partners are set to begin animal studies. If these tests are successful, Regeneron will apply for approval to launch human trials.

An antibody nasal spray could be a winning product for many reasons. First, it targets the actual point of infection. And that could help contain the spread of the coronavirus. For example, a person given a traditional vaccine may have virus in his or her nasal passage — and one sneeze could contaminate others nearby. A nasal spray could prevent this from happening.

An antibody nasal spray would also take action right away. Traditional vaccines require time for a person’s body to mount an immune response. And finally, ease of administration is another plus.

It’s still too early to say whether such a product could completely replace a vaccine, even if trials are successful. We don’t yet know about potential storage conditions or time and cost to produce an eventual product. But this is clearly a program to watch. If safety, efficacy, and logistics are favorable, an antibody cocktail nasal spray could indeed claim a chunk of the coronavirus vaccines’ market share.

Should you buy Regeneron?

Meanwhile, Regeneron is a good investment opportunity today. Why? It’s beginning to generate revenue from the antibody cocktail — and more may be ahead if the FDA grants it full approval and expands its indications. More importantly, beyond the COVID-19 programs, Regeneron already commercializes seven products. Annual revenue has been on the rise since 2012, and earnings have climbed four out of the past five years. At the same time, Regeneron’s price-to-earnings (P/E) ratio has declined from more than 100 five years ago to about 18 today.

Wall Street analysts expect the biotech stock to gain more than 40% within the next 12 months from its current level. Considering the company’s coronavirus work and revenue from other products, that’s a reasonable forecast. Beyond that, the potential antibody cocktail nasal spray could represent a catalyst for revenue and share price growth — and it may pose a threat to vaccine makers’ market share.


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