MODERNA INC. VRS OXFORD UNIVERSITY: A COVID-19 RACE

As countries around the world gradually eased their lockdown regulations in May and early June, many dreamt that we could leave the virus behind us and enjoy summer 2020 carefree. Several people are living that dream (well, not quite). Cool drink in hand — check. Swimsuit — check. Beachside view — maybe not. Unfortunately, in countries such as the United States and Mexico, the virus is surging in numbers like never before. On July 16, daily coronavirus cases in the U.S. climbed to 77,225, a brand new record during a month when people thought that the warm weather would come to the rescue. The popular and openly debated question is, “Are these high case numbers due mainly to increased testing or the lifting of lockdowns”? The answer is… it doesn’t really matter. The reality is, this virus is not going away until we develop a vaccine. It seems as though there is a new company entering the COVID-19 vaccine race every day; however, today we are going to focus on two of the major players: Moderna Therapeutics and Oxford University. Moderna certainly gets most of the hype, but is it really in a winning position? Let’s find out.

By: Matthew Rojas, Biotech Financial Analyst

What’s the Difference?

Although both of these organizations are in the process of developing vaccines for COVID-19, their mechanisms of action to treat this highly infectious disease are quite different. On one hand, Moderna is using a traditional messenger RNA or mRNA vaccine while, on the other hand, Oxford is using a more unorthodox method for its vaccine candidate: a chimpanzee cold virus with the coronavirus spike protein on its surface. We’ll start with Oxford’s vaccine because, well, Moderna always gets the spotlight.

Oxford’s Vaccine

In April of 2020, Sarah Gilbert, a Professor of Vaccinology at the University of Oxford, decided to enter the COVID-19 vaccine race with a candidate of her own, which is formally called ChAdOx1 nCoV-19. She is developing her vaccine in partnership with British-Swedish biopharmaceutical giant, AstraZeneca. The duo’s unique approach is remarkable; essentially, a chimpanzee adenovirus (common cold virus) is combined with the coronavirus spike protein, SARS-CoV-2. Once this modified virus is injected into the human body via a vaccine, the body is tricked into producing COVID-19 antibodies and killer T-cells, white blood cells that help eradicate the infection. The fact that their vaccine uses a chimpanzee adenovirus and not a human adenovirus may be critical because of its foreign status in the human body. For example, CanSino Biologic’s COVID-19 vaccine used a human adenovirus, and some people that had pre-existing antibodies to the common cold neutralized the vaccine before the body could produce a strong immune response to the coronavirus spike protein.

On July 20, 2020, Oxford released the results from its Phase I/II clinical trial for its COVID-19 vaccine. Their study revealed that 90% of the people that received the vaccine developed the necessary neutralizing antibodies as indicated in a blood test. The 10 people that did not produce the coronavirus antibodies were given a second dose of the vaccine, and all of them produced the antibodies; these people actually produced the highest level of antibodies, so this may be an efficient strategy for future vaccination. Additionally, the most common side effects were mild to moderate pain, fatigue, and headache — the safety profile looks clean. These results are extremely promising; although, the United States Food and Drug Administration (FDA) warns, “a vaccine would need to be 50% more effective than a placebo to be approved and would need to show more evidence than blood tests indicating an immune response”.

Because their phase I/II trials did not show whether the vaccine prevents/mitigates the symptoms of COVID-19, Oxford has gradually started additional clinical trials. A Phase III trial that will include 30,000 U.S. patients will begin shortly, and Phase III trials in low to middle-income countries such as Brazil and South Africa are already underway. Oxford and AstraZeneca have already committed to supplying two billion doses of the vaccine to a broad range of countries including the U.S. and the U.K. Oxford has also secured £84 million from the U.K. government and $1.2 billion from the U.S. government to speed up the vaccine production process. The two entities are unsure of an exact time frame as to when the vaccine may be potentially approved, but it may be through human trials as early as September of 2020.

Moderna’s Vaccine

Moderna was one of the first-movers in the COVID-19 vaccine race with its first batch of mRNA-1237 vaccines shipped out for a phase I trial on February 24, 2020. I am going to provide a brief description of how mRNA vaccines work, but for a more comprehensive explanation on the subject, be sure to take a look at Lee Rivers’ article on mRNA. mRNA is a molecule in cells that carries codes from the DNA in the nucleus to the sites of protein synthesis in the cytoplasm. Once Moderna isolated the coronavirus spike protein, SARS-CoV-2, they interested it into an mRNA sequence and injected it into patients. After the patients were inoculated, coronavirus antigens were produced through the transcription/translation process, and the body learned how to prepare for the real virus by fighting those antigens and developing neutralizing antibodies. So, the development of neutralizing antibodies is common to both the vaccine from Moderna and Oxford; however, to reiterate, the mechanism of action (mRNA vs. chimpanzee cold virus) is the difference between the two.

On March 16, 2020, the first patient was dosed with Moderna’s vaccine, and from there, more patients of varying ages were added to the phase I clinical trial. The results of the phase I study were overwhelmingly positive; the interim analysis states that neutralizing antibody titers were observed in 100% of evaluated patients. The safety profile of the vaccine was relatively clean; however, at the 250μg dose level, three of the 14 patients reported one or more severe events. A phase II study was initiated on May 29, 2020, and enrollment was completed on July 8, 2020; we are still awaiting the results of this clinical trial. A phase III study with 30,000 participants is expected to begin on July 27, 2020. In terms of timeline, Moderna and Oxford appear to be neck and neck with Oxford a little bit ahead because it has phase III trials initiated in some lower-income countries.

Moderna was awarded up to $483 million from the U.S. government’s Biomedical Advanced Research and Development Authority (BARDA) to accelerate the development of their vaccine on April 16, 2020. In early May, they also announced a collaboration with Lonza to manufacture up to $1 billion of the vaccines per year. More recently, Moderna entered into a collaboration with Catalent Inc. for large-scale, commercial fill-finish of Moderna’s mRNA vaccine; the company will provide vial filling and packaging capacity for Moderna’s vaccine.

Who Will Win?

Both of these organizations have strong vaccine candidates for COVID-19, but in the end, only one will win. There are pros and cons that I see with each vaccine — we will start with Oxford’s candidate. The chimpanzee cold virus approach is less traditional than mRNA, for example; therefore, there is less evidence to support that it can treat infections like COVID-19. However, their phase I/II trials have been successful thus far, so it may very well be that their phase III trial will also be successful. Some pros are that Oxford’s vaccine has a stellar safety profile and has received a significant amount of funding from governments all over the world. Additionally, Oxford has already begun phase III testing in some countries.

On the other hand, Moderna’s vaccine is more traditional, using mRNA as the mechanism of action. mRNA vaccines are faster and cheaper to produce and may be safer because they are not produced using infectious elements. Additionally, the company is using well-established manufacturers, Lonza and Catalent. Moderna also has a strong safety profile, but a few patients have had severe reactions at the high dose level. They have received a significant amount of funding from the governments but not quite as much as Oxford. It is important to note that Moderna is a clinical-stage biotechnology company, so this will be their first experience in successfully launching a drug. On the other hand, Oxford has the powerhouse of AstraZeneca backing them, a pharmaceutical giant with significant launch and marketing experience. Lastly, their phase III clinical trial is slightly behind Oxford, scheduled to start on July 27, 2020.

Only time will tell which vaccine will win the race; however, if I had to put my money on one of these organizations, I would have to bet on Oxford and AstraZeneca’s candidate. Moderna was one of the first-movers in the vaccine race, so people tend to pay attention to it more, which is why the entire market tends to swing as it did on July 14, 2020, when the company released positive phase I results. However, the reality is that its clinical trials are behind Oxford’s candidate, its safety profile is slightly worse than Oxford’s vaccine, it has received less funding than Oxford, and it does not have any experience launching a drug. For those reasons, I believe Oxford will win the COVID-19 vaccine race. Regardless of who will come out on top, multiple vaccines will be needed to help inoculate people all over the world; both of these companies have stellar candidates, so I would recommend investing in both Moderna (NASDAQ: MRNA) and AstraZeneca (NYSE: AZN).