In this article, we review:
- Market-moving news released by biotechnology company Moderna, Inc., regarding a potential COVID-19 vaccine
- Encouraging Phase I clinical data showing high levels of antibody production in the trial’s participants
- Why this is welcome and encouraging news, but by no means conclusive or confirmatory
- Upcoming clinical trials, which will focus on real medical outcomes rather than antibody levels
- The market’s high upside sensitivity to favorable medical and/or therapeutic developments
The long reach of COVID-19 into every facet of society has been so overwhelming that sometimes it feels as though its roots as a medically induced crisis is at times overlooked. This has seemed so on occasion in the financial world where recent focus has gravitated toward depression-like economic numbers, historic levels of monetary and fiscal economic stimulus, and debates over the timing of business re-openings. However, when real therapeutic news emerges, it clearly steals the spotlight from all other criteria – as it should.
On May 18, the Dow Jones Industrial Average rose 912 points (3.8%) and the S&P 500® increased 90 points (3.1%), mostly due to favorable clinical trial results announced by biotechnology company Moderna, Inc., pertaining to Phase I clinical trial data on a potential COVID-19 vaccine. While this was unexpectedly good news and clearly the best medical results to date for any potential preventative treatment for the virus, there remains much investors need to take into account at this early stage.
Specifically, this includes:
- Three phases of trials are necessary for Food and Drug Administration approval, so these results are very early and should not be viewed as conclusive or confirmatory by any means. Typically, Phase I trials deal primarily with patient safety and tolerance, to which the potential vaccine proved favorable. However in addition, Moderna released more substantive data.
- Specifically, all of the 45 participants in the trial developed virus antibodies at levels consistent with recovered COVID-19 patients, and in a smaller subset of eight patients, all were reported to have neutralizing antibodies. While this is extremely impressive for a Phase I trial, it should still be considered within the context of a safety and tolerance-based study.
- Moderna will begin a Phase II trial with a sample population in the hundreds of participants shortly, and a Phase III trial in the thousands is expected to begin sometime around July. These will be placebo-controlled trials and will focus on efficacy-based endpoints, specifically judging the medical outcomes of groups receiving the vaccine versus those not receiving it.
- These upcoming trials will tell the tale as to whether this vaccine candidate has real promise in potentially preventing COVID-19 across a wide variety of people. Investors will need to bear in mind that while this data is the best seen so far, the mere presence of antibodies, even neutralizing antibodies, should not be confused with real clinical outcomes that can only be determined in further trials.
Nonetheless, this news is the most promising to date regarding a potential vaccine for COVID-19. While the world will have to wait on further clinical trials in the months ahead, this unexpectedly good news does serve to highlight the large degree of positive sensitivity the market currently holds for preventative and therapeutic treatments.
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