COVID-19 Industry Outlook: Biotech and Lifesciences

As the COVID-19 pandemic continues to reshape economic and social realities across the globe, MGO leaders are examining specific industries to provide insight on emerging difficulties and future opportunities.

Amid the uncertainty and concerns surrounding the COVID-19 outbreak, healthcare providers, public-health specialists, government officials and investors (and the general public) are looking to the biotech industry to create a “game-saving” vaccine against the novel coronavirus.

This optimism, and pressure, is particularly visible in the stock market where – even during the carnage of recent weeks – the biotech industry has held up better than others: the year-to-date decline of the Nasdaq Biotech Index, for instance, was only about half the selloff suffered by the broader market.

And while the industry arguably has performed well, it nevertheless has encountered difficulty on several critical fronts:

• Clinical trial delays and suspensions
• Supply chain failures
• Approval and application delays

“The COVID-19 pandemic represents a significant, ongoing public health threat and has created an unprecedented burden on healthcare systems across the globe,” says Jay Luly, Chief Executive Officer of Enanta Pharmaceuticals. “With the safety of our clinical trial participants in mind, coupled with a desire to alleviate many of the resource constraints at clinical trial sites, Enanta has proactively decided to make adjustments to some of our clinical programs.”

In the following, we take a deeper look at these three issues and the impact they are having on the industry, as well as an analysis of some the potential changes that could impact the biotech industry going forward.

Impact on clinical trials

There is unanimous agreement that COVID-19 already is causing significant delays and suspensions in clinical trials. Why this is important: Absent trial data, new drug filings likely will be delayed … meaning some important new medicines will take longer to reach the market.

BIO, the industry trade group, cites two additional issues that could affect trial schedules. They are:

• Missing or delayed data collection from ongoing clinical trials, particularly at hospital sites overwhelmed by COVID-19 cases
• Difficulties getting new clinical trials up and running because patients are reluctant to enroll or unable to visit hospitals

This is no small matter. Biotech and pharma, together, have some 120 Phase 3 clinical trials (with top-line data readouts) expected before the end of the year, according to BioMedTracker.

Eli Lilly, for instance, said it will delay the start of new clinical trials and suspend enrollment in “most” ongoing studies. Trials in which patient enrollment has already been completed will continue. Lilly is listed as the sponsor of 86 clinical trials currently enrolling patients, including 30 in Phase 3, according to ClinicalTrials.gov. Another 78 studies are active but no longer recruiting patients.

Others recently taking similar actions include Pfizer, Merck, Bristol Myers Squibb, Provention Bio and Galapagos. Each has paused the launch of some new studies, as well as enrollment in some ongoing studies.

The FDA has issued new guidelines designed to help the companies maneuver through this challenging period. Among other things, it offers standards for ensuring the safety of trial participants and maintaining compliance with good clinical practice.

It’s impossible to know how many clinical trials will be affected adversely by the coronavirus outbreak, but the BioMedTracker database features 120 Phase 3 clinical trials being conducted by biotech and pharma companies with market values greater than $300 million. All of these clinical trials were expected to announce top-line results before the end of the year.

At stake are some closely followed drugs with blockbuster projections:

• Asthma medicine tezepelumab from Amgen and AstraZeneca
• Rare disease treatment mitapivat from Agios Pharma
• Heart failure drug omecamtiv mecarbil from Amgen and Cytokinetics
• Hemophilia therapy fitusiran from Sanofi and Alnylam Pharma

The database also includes mid-stage, or Phase 2, clinical trials, some of which could also serve as the basis for FDA submissions. Some 160 such studies have trial results scheduled for this year.

Another potential problem is the fact that the industry outsources much of the day-to-day operations of clinical trials to contract research organizations (CROs) like IQVIA Holdings (IQV), PRA Health Sciences (PRAH), Syneos Health (SYNH), and Medpace Holdings (MEDP). These CROs monitor clinical sites by assigning teams to the clinics to verify data in the trial database accurately reflects the patient's medical records.

Some clinics, however, have stopped allowing clinical trial monitors on site. And that means companies are unable to “lock” the database (an essential step that precedes analyzing the data).

Patient behavior, too, is having an impact on trials.

A survey by Continuum Clinical, a consulting firm that works with drug makers and trial sites, found that:

• One-third of clinical trial sites expect COVID-19 to have a “big or extremely big” impact on their ability to recruit patients for new trials or keep enrolled patients in existing studies
• 39 percent of 170 clinical trial sites in the U.S. believe patients will be much less or somewhat less likely to enroll in new trials
• 25 percent of the sites expect patients currently enrolled in a trial to be much less or somewhat less willing to continue participating

COVID-19's impact on supply chains

Expect supply disruptions or shortages of critical medical products in the U.S. So says Dr. Stephen Hahn, FDA Commissioner.

What’s affected:

• Manufacturing and importing active pharmaceutical ingredients (APIs) and excipients
• Manufacturing facilities will be stretched by employee absences
• Training of employees assuming new responsibilities will be critical
• Independent laboratory testing associated with manufacturing may be slowed due to demands for testing related to COVID-19

The agency has been active: It has contacted more than 180 drug companies to discuss the requirement to notify the FDA of supply disruptions and to ask them to evaluate their supply chain. The agency says its focus is on China, but that all supply chains will be impacted.

Application/approval delays

Application and approval timelines also could be at risk. Wall Street analysts worry the COVID-19 outbreak could result in regulatory employees having to work from home for an extended period, regulators becoming infected, or FDA bandwidth being overwhelmed by the virus itself.

Moreover, in instances where a sponsor has an new drug application (NDA), abbreviated new drug application (ANDA), biologic license application (BLA) or application supplement pending with the FDA, they could encounter delays and find the agency not in alignment with their timetables.

Industry press also has reported that the Center for Drug Evaluation and Research (CDER) has cancelled all non-essential travel for the next few weeks. Additionally, all CDER outside meetings, conferences and workshops will be postponed through April. FDA staff have further been encouraged to hold teleconferences rather than in-person meetings with external persons.

Biotech and lifesciences going forward

Predictions, of course, are somewhat chancy given the multiple unknowns at this point. However, there are some emerging developments that seem more likely than others to have enduring impact. Here are five to consider.

Virtual Trials
Given the concerns about interruptions and postponements to clinical trials, virtual trials are likely to become the rule, rather than the exception, in the not-too-distant future. What the FDA currently suggests: virtual visits, phone interviews, self-administration and remote monitoring. These adjustments already are being used during this period of quarantines, travel limitations and closings and the new procedures may get locked in over time.

Friendly FDA
Biotech companies should encounter a very friendly FDA. Over the past 10 years, the agency’s annual approval rate of novel drugs has more than doubled, reaching 48 last year. There’s no reason to believe that trend is going to change. And that should be good news for biotech companies and their pipelines.

Scrutiny of Imports
Imported drug products are facing increased scrutiny at U.S. ports of entry and it’s hard to see the U.S. backing off from that standard in the future. The FDA warns it may deny entry of unsafe products, conduct physical examinations and/or product samplings, review a company’s previous compliance history, and request records in advance/instead of on-site drug inspections.

Restructured Supply Chains
China-based companies are critical components of the international supply chains of multiple industries. Biotech is one of them. Pricing, subcontracting and other factors have contributed to the growth and entrenchment of this structure. Now, however, the chaos caused by COVID-19 has underscored the unprecedented country risk that has been created in the process. Expect efforts aimed at regionalizing supply chains, developing second sources and creating proprietary stockpiles.

More Private/Public Partnerships
Look for greater cooperation between public and private organizations. Real-time example: Governor JB Pritzker’s recent announcement of a new partnership between the state of Illinois and the Illinois Manufacturers’ Association (IMA) and the Illinois Biotechnology Innovation Organization (iBIO) to increase in-state production of essential supplies.