Covid is clearly here to stay. Yesterday it was the delta variant, today it is Omicron and who knows on which letter of the Greek alphabet we will be tomorrow, this spring, next winter.
Vaccination programmes can only go so far. In the UK the percentage of double-vaccinated people is fairly high but the uptake of booster jabs is lagging behind. Some form of jab fatigue is setting in. In Europe, a much larger portion of the population is firmly against vaccines, mainly for fear of potential side effects. The arrival of Omicron and then the next variant will not change that.
Protection against Covid
But all of us will still need some protection against Covid, even if we have already been jabbed or have contracted the illness at some stage. Going forward that protection is more likely to be in the form of antiviral drugs. For one, antivirals don’t have to battle the same suspicions as vaccines. For instance, in parts of the EU and particularly in Eastern Europe vaccines have been getting far more negative press than in the UK with media focusing on vaccine cases with particularly bad side effects. Consequently the uptake of vaccines is lagging behind the UK and the US. Taking an over-the-counter pill to soften the effects of Covid is likely to meet far less resistance.
Covid antivirals
Also, unlike vaccination programmes, antivirals don’t require logistics on the scale of a whole country’s health system but are (or eventually will be) as easily accessible as paracetamol or Lemsip. Pharmaceutical companies have already realised that antiviral medication requiring hospitals is not the way forward at a time when hospitals are already stretched. A case in point is Gilead Sciences, the developer of the Remdesivir drug made famous by Donald Trump, which abandoned research into the intravenous infusion form of the drug because it wanted to address the requirements of non-hospitalised Covid patients.
Two of the most prominent Covid antivirals already in use are Paxlovid, developed by Pfizer, and Molnupiravir developed by Merck and Ridgeback Biotherapeutics. According to a Pfizer statement this week the Paxlovid antiviral pill reduces the risk of hospitalisation and death by 89% in high risk patients. Because antivirals stop viruses from replicating, they are most effective in the early stages of an infection. To have an optimal effect these types of drugs need to be widely available and easily taken by anyone infected with the virus.
Investment ideas
As an investment, Pfizer NYSE:PFE and Merck & Co NYSE:MRK make an obvious choice, but there are other options out there. Pfizer shares have risen nearly 50% since the start of the year and given the latest announcement still have some way to go. Merck shares are down 4.14% on the year, primarily because the firm is trailing behind Pfizer in its Covid-related R&D but any Covid-related breakthroughs will push the shares higher.
Swiss firm Novartis AG [SWX:NOVN] started clinical trials of its antiviral drug in May in cooperation with another Swiss firm, Molecular Partners [SWX:MOLN] (both traded on the Zurich Stock Exchange). Johnson & Johnson NYSE:JNJ is doing research with the University of Leuven in Belgium on antiviral compounds.
Some of the Covid antiviral research still has a way to go and some has outright failed. But if we will have to live with Covid going forward then a simple solution like a tablet will be the way forward.
