As it turns out, we’re not out of the woods yet in terms of the negative effects of the COVID-19 pandemic on the global economy. Last Monday, Goldman Sachs lowered its projections for US economic growth over Q3 and Q4 in response to mounting anxiety over stagnating consumer spending alongside the rapid spread of the Delta variant.
These lowered expectations for the US, and by extension worldwide economic recovery, coincides with surging infection rates across the world.
This correlation should not be simply shrugged off; the tight nexus between global infection rates and economic performance has been clearly illustrated since the outbreak of the pandemic in early 2020 and the corresponding downturn in stock exchanges worldwide witnessed in March 2020.
With the roll-out of vaccines, the global economy has since enjoyed a bullish rally over Q1 and Q2 2021, engendering high hopes of a robust, K-shaped recovery. Yet, as the Dow Jones, S&P 500, and NASDAQ composite indexes rose to new all-time highs in July 2021, an increasingly vocal chorus of analysts and investors are bracing themselves for another COVID-induced market correction in coming months.
Despite the successful race-to-the-finish for an effective and safe vaccine, spearheaded by pharmaceutical giants such as Pfizer (NYSE:PFE), Moderna (NASDAQ:MRNA), and Johnson & Johnson (NYSE:JNJ), a myriad of public health challenges remain that continue to impact a broader macroeconomic recovery.
These outstanding difficulties range from starkly uneven vaccination rates from country-to-country, to vaccine hesitancy, to new, more potent, strains’ ability to infect the fully inoculated. In response, a number of biotechnology and pharmaceutical innovators are stepping up to the plate in exploring novel COVID-19 therapies and solutions.
Israel has long been recognized as a hub of inventive biotechnology and life-sciences firms, living up to its reputation as the start-up capital of the world. Dozens of companies that originated in Israel or on the Tel Aviv Stock Exchange (TASE) have successfully listed on major American indices, such as NASDAQ and the NYSE.
In fact, the Israeli life sciences sector raised record funds in 2020, representing a 55% year-on-year increase that is only expected to continue moving forward. This set of favorable market and domestic conditions has led several Israeli biotech and pharma companies to initiate intensive R&D efforts to bring a wider portfolio of COVID-19 solutions, from orally-ingested vaccines to regenerative cell-therapies, to market.
A survey of three of these Israeli biotech disruptors can shed light on emerging treatments that, as outlined above, are liable to exert a significant impact on both share price and overall market performance.
1. Bonus BioGroup
Bonus Biogroup (TASE:BONS) is an Israel-based innovator that is working to apply cell therapy and regenerative medicine to the treatment of severe COVID-19 cases. On July 19, Bonus reported further improvements in key parameters tested in Phase I/II clinical trials for its MesenCure treatment.
Bonus’ newfangled MesenCure relies on activated mesenchymal stromal (stem) cells taken from healthy adult donors. Using these stem cells, MesenCure works to reduce severe COVID-related symptoms such as acute pneumonia and organ failure that are caused by a massive inflammatory reaction (viz. Cytokine storm) in patients suffering from severe COVID.
Given MesenCure’s measured 100% success rate to-date, the Israeli Ministry of Health has approved the continuation of Phase II clinical trials, set to take place at Haifa’s Rambam Medical Center.
2. Oramed Pharmaceuticals
On July 22, Oramed Pharmaceuticals Inc (NASDAQ:ORMP) announced that it is beginning clinical trials in Israel for a prospective single-dose, oral vaccine currently being developed by India-based Premas Biotech.
A single-dose orally administered vaccine has massive potential to close the gap in vaccination rates between developed and developing countries. India is a prime example, where a mere 5% of the population is vaccinated, and issues in logistics and supply have severely hampered an effective vaccine rollout. Pending final approval from the Israeli Ministry of Health, Oramed is expecting to begin the trials next month at Tel Aviv’s Sourasky Medical Center.
3. RedHill Biopharma
Another Israeli company energetically pursuing orally-administered COVID treatments is Redhill Biopharma Ltd (NASDAQ:RDHL). RedHill approaches the puzzle of novel COVID treatments from its area of expertise as a specialty pharmaceutical company. On July 19, the company announced its had completed patient-follow-up in a 475-participant global Phase II/III study of an oral treatment for severe COVID-19.
RedHill’s solution is based on Opaganib, a proprietary chemical entity with antiviral and anti-inflammatory properties that can be orally administered for the treatment of severe cases of COVID-19 and its emerging, more aggressive, strains. While further results are expected in coming weeks and the company has yet to receive regulatory approval for general use, RedHill’s development of a potentially revolutionary chemical entity, Opaganib, points to the creative direction Israeli R&D is taking in response to the ongoing pandemic.
These three biotech and pharma companies are a representative sample of some of the pioneering solutions for SARS-CoV-2 viruses being explored in Israel and beyond.
Not only do these examples showcase the accelerated scientific innovation spurred by the pandemic, but they also typify the agility and adaptability of private sector actors in responding to fast-changing circumstances.
The world was awed by the relative speed in which leading pharmaceutical companies such as Pfizer and Moderna developed an effective COVID-19 vaccine; as the virus morphs and persists, other actors like Oramed, RedHill, and Bonus BioGroup are now leading the charge in developing life-saving treatments.
As markets brace for a potential pullback in Q4, enormous potential remains to be capitalized on in the biotech and pharma sectors, specifically with respect to COVID solutions. The rise or fall of biotech stocks is notoriously dependent on external variables such as the outcome of clinical trials and regulatory approvals, thus demanding a high level of scrutiny from investors.
Even so, the unmatched urgency for a wider portfolio of global COVID treatments has opened up a number of highly-lucrative investment opportunities. Israel’s robust biopharma sector is a veritable goldmine of pending COVID-19 treatments and therapies that are waiting to be tapped by the discerning and forward-thinking investor.