By Geoffrey Smith
Investing.com -- For most of the four months since Europe and North America went into lockdown to stop the Covid-19 virus, investors have been focusing on which stocks will profit most from the economic changes likely to follow it.
In Europe, at least, it’s been relatively rare for the stocks in the front line of combating the infection to be at center stage. However, that’s definitely the case on Monday, with the market eagerly awaiting the results of the latest trial of the experimental drug being developed by Oxford University and AstraZeneca (LON:AZN).
The medical journal The Lancet is due to publish the results of the first large-scale human trial of the experimental vaccine, a trial that has involved 9,000 patients in South Africa and Brazil. Early-stage results had shown that the drug had provided double protection from Covid-19, triggering the body to produce both antibodies and so-called T-cells to kill the infection.
Antibodies are proteins that kill the virus itself. T-cells, meanwhile, can also kill the cells it has infected, greatly strengthening the body’s response to viral infections. The contribution of T-cells is important because antibodies can weaken within a few months, reducing a person’s long-term immunity to the virus.
Speculation that the results will be encouraging already drove AstraZeneca’s stock to a new all-time high on Friday, and it added a further 2.1% by mid-morning in London on Monday. Its 23% rise so far this year has made it the most valuable stock in the FTSE 100, worth 124 billion pounds ($156 billion).
If the results are positive, Adrian Hill, director of Oxford University’s Jenner Institute, has indicated that the critical phase 3 trials may be completed by the end of the year, complemented by a so-called ‘challenge trial’, in which healthy volunteers are deliberately exposed to the virus in a controlled lab setting. Challenge trials can typically be completed in less time.
However, AstraZeneca wasn’t the only biotech company in the spotlight on Monday. Dutch medical giant Koninklijke Philips NV (AS:PHG) stock rose 4.8% to its highest since January after saying it expects profits to return to a year-on-year increase in the second half, as it works through a ballooning order backlog. The company's results had been hit by drops in demand for its non-Covid-19 related products and services in the first half, but the second quarter was supported by a surge in demand for its ventilators.
U.K.-based small-cap Synairgen (LON:SYNG), spun out of the University of Southampton’s research facilities, rose as much as 300% after it announced highly encouraging early-stage trial results for its experimental Covid-19 treatment, a protein called interferon beta.
The test results indicated the drug cut the chances of a Covid-19 patient in hospital developing severe disease - such as requiring ventilation – by nearly 80%.
Patients were also more than twice as likely to recover to a degree where the disease would not inhibit their everyday lives, the company said.
Separately, GlaxoSmithKline (NYSE:GSK) said it will invest 150 million euros ($173 million) in CureVac, the German-based biotech company at the center of a diplomatic incident between the U.S. and Germany earlier this year.
CureVac fired its CEO Daniel Menichella in March after reports that he had accepted overtures from the Trump administration to make its experimental drug available exclusively to the U.S.