October 2, 2014
By Riley McDermid, BioSpace.com Breaking News Sr. Editor
Wall Street traders had another wild day betting on the next biotech firm with a potential Ebola vaccine or cure, but analysts who cover the sector said Thursday it would be wise for companies to start stockpiling supply now, or risk running out like Mapp Biopharmaceuticals, Inc. did with experimental Ebola treatment ZMapp.
“Ebola is about stockpiles and vaccines: The U.S. government (and other governments) will stockpile large amounts of vaccines and therapies that address biologic threats,” wrote Joshua Schimmer, a senior research analyst at Piper Jaffray, in a note to investors. “The best examples of this are smallpox, anthrax, swine flu. Companies contributing to these stockpiles can earn $100 million a year or more depending on contracts.”
Schimmer pointed out that even a single case of Ebola in the U.S. may curtail travel or investments but companies that are quick to the draw stockpiling their inventory could help prevent a price war if there is an outbreak.
To qualify for government stockpiles, drugs typically need to demonstrate efficacy in two animal models and safety in humans. “[But] one does not need to test a drug in an Ebola patient to qualify for stockpiling,” pointed out Schimmer.
Companies must also fulfill a request for proposal from the U.S. Department of Health and Human Services’ Biomedical Advanced Research and Development Authority or agree to a contract in a potentially competitive environment.
“This is an important role of government for protecting citizens because few profit-driven companies will find it attractive to stockpile for a ‘doomsday’ scenario,” said Schimmer. “With Ebola on the march in Africa and with surprising ease of transmission, it now poses a threat to move beyond the continent.”
The question of whether or not the U.S. will face a full-scale outbreak remains open. But Schimmer said companies with helpful technologies must stay mindful of their possible civic responsibility.
“It’s unclear why Ebola is gaining traction now; it may be related to increased infrastructure within Africa, allowing it to spread; if so, one might expect more "’Ebolas’ in the future,” he wrote. “While the spread of Ebola may or may not be contained, it will still linger as a threat and potentially force preparatory stockpiling.”