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The COVID-19 omicron variant has diminished the efficacy of the US’s most prominent antibody treatments. As the genome of this virus constantly changes, it appears increasingly likely that new drugs and therapeutics will need to be developed to beat back the pandemic. That could spell opportunity for biotech and pharma firms that have yet to deploy effective COVID-related products.

Just as popular antibody treatments are weakening, antiviral pill-based treatments are on the rise. Pfizer and Merck have received emergency use approval to deploy millions of courses of their Paxlovid and molnupiravir drugs in the US an are receiving more orders across the world.

Related ETFs & Stocks: SPDR S&P Biotech ETF (XBI), Invesco Dynamic Pharmaceuticals ETF (PJP), Regeneron Pharmaceuticals, Inc. (REGN), Eli Lilly and Company (LLY), Pfizer Inc. (PFE), Merck & Co., Inc. (MRK)

Omicron Makes Some Anitbody Treatments Obsolete

In mid-December, German researchers found that COVID-19 therapies bamlanivimab and etesevimab, developed by Eli Lilly, as well as Regeneron’s Ronapreve, lose most of their effectiveness when exposed in laboratory tests to the omicron variant of coronavirus. This has been a consequential revelation, considering monoclonal antibody treatments have played a huge role in beating back the pandemic for some time, particularly after the US government began ordering hundreds of thousands of doses in autumn of 2020.

At the time, MRP noted that former President Donald Trump’s recovery from COVID, partially facilitated by a cocktail of antibody treatments, would thrust these therapeutics into the spotlight and trigger a new catalyst in the development of COVID-19 treatments for months to come.

Since July 2021 alone, 2.7 million anitbody treatment courses had been administered, Jeff Zients, the White House’s COVID-19 response coordinator, said in a December briefing.

In light of the lab results showing the most common antibody treatments losing their efficacy, Reuters also reported that protection from GlaxoSmithKline and Vir’s antibody cocktail sotrovimab (also known as Xevudy) held up when exposed to omicron in lab experiments. While that is positive news, sotrobvimab remains in relatively short supply. Department of Health and Human Services data, cited by The Hill, indicates that the government had only shipped 55,000 GSK treatments through mid-December compared to 1.2 million doses of Regeneron to and around 670,000 doses of Eli Lilly’s treatment since September.

Last month, Eli Lilly raised its expectations for 2021 profit and sales, as well as its forecast for 2022. While sales of about $2.1 billion in 2021, up from an earlier forecast of $1.3 billion, may already be secured, it was only days later that the US government decided to pause distribution of Eli Lilly and Regeneron’s antibody drugs, throwing their 2022 estimates into uncertainty.

This move may have profound impacts on companies that have become increasingly dependent on these antibody treatments, but it could also present a new opportunity for biotech firms that can be versatile.

It looks increasingly likely that the development of COVID treatments may need to continue indefinitely to deal with perpetual mutations of the virus. Just one week ago, another heavily mutated variant of COVID that’s infected at least 12 in the south of France, having likely originated in Cameroon, was isolated in a lab. Per a newly-released paper from the IHU Mediterranee Infection Foundation, the genome of the variant, currently called “B.1.640.2”, exhibits 46 mutations. That is just shy of the 50 mutations detected in the omicron variant that’s currently driving a global surge in COVID infections.

It’s not just about the number of mutations, however, as tests show…

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