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We talk to SV Health Investors about COVID-19

This week, I was fortunate to catch up with SV Health Investors, managers of the unquoted investments within International Biotechnology Trust. The discussion centred on COVID-19 and how it is affecting the healthcare industry. One UK-based member of the team, Kate Bingham, is a member of the UK Government’s Vaccine Taskforce. The majority of the team is based at the firm’s offices in Boston.

On the virus, the message seemed to be that it is going to be with us for a long while. They think it is likely that we see recurrent seasonal bouts of infection. There are no current vaccines for any coronavirus but that does not mean that it is impossible to develop one. 41 diagnostic tests are in use or being trialled. In addition, there are 23 therapies for patients affected by the virus and 5 vaccines under trial.

Biotech stocks have been doing well recently but that is as much about the end of Bernie Sanders’ presidential campaign as any perceived affect from the pandemic.

Large parts of the healthcare industry have been repurposed to tackle the virus. This is affecting hospital-based clinical trials, some have been delayed and some have stopped recruiting new patients. Elective procedures have been suspended in most areas. I have seen stories that some US states are restarting these (I cannot help but feel prematurely) but so too may be Germany, where the fight to control the virus is seeing results.

The SV Health funds have some exposure to companies that are helping with the fight against COVID-19. These include Adimab, which is investigating ways of using antibodies recovered from the plasma of patients who have recovered from coronavirus to help patients fighting the disease; AeroCare, which is supplying oxygen to help patients being treated at home in the US; and BardyDx, whose products are being used to monitor patients that have been treated with Hydroxychloroquine for arrhythmia. Doctors are trying avoid therapies for non-COVID-19 diseases that rely on supressing the body’s immune system where they can. This is benefitting one of SV’s companies, Clarify Medical, which uses a UVB light system to treat psoriasis – preferable at this time to immunotherapies aimed at that condition.

Testing for coronavirus is a big topic here in the UK. There are two types of test – those that test whether the virus is present in a patient and those that test whether a patient has been exposed to the virus in the past. The first set of tests should be very widely available, although there are issues around the availability of reagents. The second set are harder to develop and will take time to become widely available.

Various different types of therapy are being tried including Hydroxychloroquine (based on the trial in France which was debunked by some scientists), antivirals used to treat HIV (early signs are not encouraging) and Gilead’s Remdesivir, a drug developed to treat Ebola. The latter trial will read out at the end of April (early data from an abandoned trial reported on Friday 24th is not conclusive).

Of the five vaccine trials, three are based in China and two in the US. The first human trials began on Thursday. Preclinical data was available on two or three of these. Kate puts the chances of success at about 10% on those that weren’t the subject of preclinical trials and 15% for the others. She does not anticipate that a vaccine will be available before the end of the year at the earliest and more likely it will take more than a year (tallying with the 18-month timeline that was spoken of a few months ago). One big question will be whether any vaccine gives lasting immunity or whether a regular boost will be needed.

Perhaps the most encouraging news from the call was that, whatever the political rhetoric, there is huge international cooperation between drug companies as they seek the tools to fight the pandemic. We must be patient.

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