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GSK, Pfizer, Johnson & Johnson share prices go head-to-head after Covid-19

Drugs that cure cancer have long been the holy grail among pharma companies, who have been researching the disease for decades. The science has now advanced to the point where some drugs are showing phenomenal success rates; one trial resulted in all 14 patients being treated for rectal cancer going into remission. The race is now on to get these drugs to market, and the big pharma companies are battling it out.

When Covid-19 began to sweep across the world, the big pharma firms dedicated themselves to finding a way to treat — and prevent — the virus. The heavyweights in the race were GlaxoSmithKline [GSK.L], Johnson & Johnson [JNJ] and Pfizer [PFE] — the eventual winner.

But while vaccine rollouts and booster programmes across the world are still ongoing, investors are keen to see where these firms plan to generate value next. And immunotherapies — treatments that typically target cancers but can also be used to treat things such as diabetes, genetic disorders and allergies — seem to be where the attention is shifting.

Pressure has been building to find a cure for the world’s most common cancers. According to the World Health Organization, cancer is a leading cause of death worldwide, with 10 million people losing their lives to this type of disease in 2020. Breast, lung, colon and prostate cancers are the most common, with 7.8 million people receiving these diagnoses in 2020.

The science is advancing at a rapid pace. Earlier this month, a medical trial at the Memorial Sloan Kettering cancer center in New York, using an experimental immunotherapy to treat patients with colorectal cancer, resulted in 100% of the participants going into remission. Since the announcement on 8 June, the iShares Genomics Immunology and Healthcare ETF [IDNA] and the Loncar Cancer Immunotherapy ETF [CNCR] have risen 6% and 6.3%, respectively.

GlaxoSmithKline doubles production of adjuvant

On 23 June, GSK announced that it would invest £1bn over the next 10 years to tackle infectious diseases, including creating a new unit that will focus on diseases such as malaria, tuberculosis, HIV and neglected tropical diseases in low-income nations.

As part of its plan, GSK said it would double the production of adjuvant, a substance used to boost the body’s immune response to vaccines. In a statement to reporters in Rwanda, as reported by Bloomberg, GSK’s chief global health officer Thomas Breuer said the action will support the distribution of its malaria vaccine, a world first, which is hoped to “dramatically reduce the use of antibiotics”.

GSK also announced that it has agreed to acquire biopharma company Sierra Oncology [SRRA], which is developing therapies for rare cancers, for $1.9bn. In the year-to-date, the GlaxoSmithKline share price has risen 10%, and the consensus price target among analysts is 1,761.92, according to MarketBeat, representing an upside of 2.4% from its current price.

Pfizer invests in cancer research startup

It was revealed this week that Pfizer was among the investors to participate in a $70m funding round for immuno-oncology startup DEM BioPharma. The firm uses CRISPR technology to create drugs that can eliminate tumours by identifying which cells to ‘eat’ and which to leave alone.

Last year, Pfizer made another big cancer-beating investment, announcing in November that it had acquired Trillium Therapeutics for roughly $2.2bn.

Trillium’s focus is on creating immunotherapies that can detect and destroy blood cancer cells. The firm says that over 1 million people across the world were diagnosed with some form of blood cancer in 2020, and that these types of cancer account for 6% of overall cancer diagnoses.

Pfizer is also currently developing a lung cancer drug, Lorlatinib, which, in the company’s most recent update in May, has been shown to halt disease progression after three years in 64% of patients. Pfizer’s oncology division brought in $2.97bn in Q1 2022, up 4% year-on-year. Its share price is currently down 10% in the year-to-date.

Johnson & Johnson seeks approval for cancer-shrinking drug

Johnson & Johnson has been busy developing a new drug, Balversa, that uses biomarkers to find and shrink cancer cells. In theory, a drug that can do this could be used to treat any type of cancer — so long as it can get approval.

So far, the US Food and Drug Administration has only approved a small number of such medicines. In 2018, it approved a therapy developed by Bayer, which had a 75% positive response rate across clinical trials. Merck [MRK] also received approval for its drug Keytruda, which works in a similar way to Balversa, in 2017.

Clinical trials show that Johnson & Johnson’s Balversa can control disease in just over 75% of patients who had exhausted other therapies, and shrank tumours in 26.4% of patients with various cancers. It has been tested on people with bile duct, brain, breast, endometrial, lung, and ovarian cancers, among others.

At its Q1 results announcement, however, Johnson & Johnson revealed trouble in its immunotherapy department. Sales of Remicade, which is used to treat Crohn’s disease and arthritis, among other conditions, had fallen 15% as patients opted for lower-cost alternatives. Sales of Zytiga, a prostate cancer medication, also fell.

The Johnson & Johnson share price is currently up 7% in the year-to-date, and the consensus among analysts is ‘buy’, according to MarketBeat. The average price target sits at $190.50, representing a potential 6% upside.

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