Pfizer’s Vaccine-Plus-Treatment Strategy For RSV (NYSE:PFE)

When you are onto a good thing it makes sense to keep doing it. Pfizer’s (NYSE:PFE) success with its Comirnaty COVID vaccine partnership with BioNTech (BNTX) and Plaxovid oral treatment is a “protect and treat” strategy that has worked spectacularly well. The latest FDA Emergency Use Authorization for the Comirnaty vaccine is for a second booster (4^th dose) for individuals 50 years and older, and for immunocompromised individuals 12 years and older. I don’t think that this will be the end of the COVID vaccine story and Comirnaty is clearly a winner. This year Pfizer expects combined sales of Comirnaty and Plaxovid to reach $54 billion. The challenge is what to do with the massive war chest that it has assembled. The latest news from Pfizer involves building another viral franchise for RSV (Respiratory Syncytial Virus) with its own vaccine, to be coupled with treatment through acquisition of ReViral. Pfizer has also announced a fourth mRNA vaccine partnership with BioNTech concerning a Shingles vaccine. These developments provide substance for my contention that the COVID vaccine partnership with BioNTech is but part of a broader strategy for Pfizer’s business growth.

Respiratory Syncytial Virus

Respiratory Syncytial Virus (RSV) is one of 3 very common respiratory diseases, the others being SARS-CoV-2 (COVID-19) and influenza, and these three viruses are grouped in studies on human infection. RSV is a mild disease for most, but it can be dangerous for the very young and the elderly. Globally 64 million people are affected annually, with 3 million hospitalisations and 160,000 deaths annually from RSV, mostly in young children or the elderly, so RSV is a significant disease. A US study indicated that the RSV disease burden just for adults aged above 60 was in the range $1.5-3.0 billion.

In China more than 3.3 million pediatric and elderly patients develop RSV-associated infections annually, with 400,000 requiring hospitalisation. RSV causes 1 in 5 lower respiratory tract infections worldwide and there are many associated respiratory illnesses.

There is no vaccine available for RSV, no FDA approved RSV therapy for adults and only 2 FDA approved treatments for at risk infants.

RSV Vaccine progress

There is a long history of failure to make a vaccine protective for RSV, dating back to the 1960s when an inactivated viral vaccine failed to protect small children and indeed some deaths resulted. If you are interested in the history here is a detailed review of the long story of many failures. A key breakthrough came in 2013 with the discovery of the structure of the RSV F-protein which is the means by which RSV infects human cells, and which is found in two conformations, Pre-F and Post-F (before and after fusion). The Pre-F form is the vaccine candidate protein of choice and Pfizer’s RSV vaccine program has focused on understanding (and manufacturing) a stable form of this protein as the vaccine candidate. Pfizer’s RSVpreF is a protein vaccine with stabilised modified Pre-F proteins from two forms of RSV (RSV-A and RSV-B).

Pfizer is well advanced with its vaccine program for RSV, having recently received FDA Breakthrough Therapy Designation for RSVpreF to prevent RSV in older adults. This follows FDA Breakthrough Therapy Designation for preventing RSV-associated lower respiratory tract disease infants from birth to 6 months by active immunisation of pregnant women. Two Phase 3 trials are ongoing for the elderly and for pregnant women.

The interesting question is as to whether eventually Pfizer might explore a mRNA version of a stabilised Pre-F protein, but clearly the protein-based version is today’s target for Pfizer.

Treatment

The RSV vaccine story is complemented by news that Pfizer will fast track its entry to a treatment for RSV through acquisition of privately held, clinical stage UK company ReViral.

ReViral has a two-pronged approach to RSV treatment.

Firstly Sisunatovir is a small molecule oral treatment, which targets viral infection of cells, is potent against RSV-A and RSV-B strains. Sisunatovir has a favourable toxicity and safety profile. ReViral is partnered with Chinese company LianBio (LIAN) for commercialisation in China, Hong Kong, Macau and Singapore. Sisunatovir is in Phase 2 trials for Infants and Adults, with initial success in reducing viral load in the adult Phase 2 trial.

A second target involves N-Protein inhibitors (RSV-N), which have potential for monotherapy or in combination with Sisunatovir, which targets a different stage (replication) of the RSV lifecycle. RSV-N therapy has entered Phase 1 trials for adults and infants. Combination treatment of Sisunatovir and RSV-N is in pre-clinical stage of development.

Current treatments for RSV are limited and focus on supportive care.

Pfizer is clear that the ReViral acquisition will hopefully transform a $0.5 billion acquisition into a $1.5 billion annual product(s) for treating RSV infection. The terms of the acquisition agreement are for Pfizer to pay ReViral up to $0.525 billion, which includes upfront and developmental milestones. Clearly, Pfizer intends to fast track the development of the ReViral RSV treatments.

Pfizer’s mRNA strategy

The above one-stop-shop strategy for RSV is just one aspect of Pfizer’s business development. A lot has been written about the amazing results Pfizer has achieved in scaling up and marketing its COVID effort on COVID vaccination with BioNTech. CEO Albert Bourla has even written a book “Moonshot” about it. I still think that many Market Analysts miss that this is bigger than a single vaccine. The mRNA technology is revolutionary and will shake up the whole vaccine story.

Earlier this year Pfizer articulated that it sees the technology as “game changing”. It indicated a 4 component roadmap for mRNA technology which takes it beyond vaccines :

• Invest to strengthen core franchise in COVID-19 vaccines with BioNTech

Of course Comirnaty has provided huge cash resources for further investment

• Grow prophylactic vaccines

Flu and Shingles

Other infectious diseases

• Pursue additional opportunities with strongest benefit/risk

Rare disease – bases editing partnership with Beam Therapeutics (BEAM)

Oncology – internal efforts to leverage cancer vaccine experience

• Explore opportunities in larger indications

Inflammation and Immunology

Internal Medicine – eg next-gen base editing

The above is a broad canvas that Pfizer plans to exploit with mRNA technology.

Pfizer and BioNTech

The expanding BioNTech and Pfizer mRNA technology vaccine association becomes clearer with a recent announcement concerning a Shingles mRNA vaccine, in addition to two influenza partnerships, which have been overshadowed by the COVID vaccine development. As I’ve indicated recently, BioNTech is a company that has grown its business on partnership and its partnerships are substantial and long term.

Shingles mRNA vaccine

In January Pfizer and BioNTech announced a partnership to develop the first mRNA-based Shingles (caused by herpes zoster/ Chickenpox virus) vaccine as a follow-on from the successful Comirnaty COVID-19 vaccine. The partnership involves Pfizer’s antigen technology and BioNTech’s mRNA platform, with clinical trials likely to commence in H2 2022. The terms of the deal are similar to the Comirnaty deal, with Pfizer providing $225 million upfront, being $75 million cash and $150 million equity investment, while BioNTech will provide Pfizer with an upfront payment of $25 million for provision of proprietary antigen sequences delivered by Pfizer. BioNTech will receive future approval and sales milestone payments of up to $200 million.

BioNTech CEO Ugur Sahin says that the Pfizer/BioNTech partnership aims to develop a mRNA vaccine with good safety profile and high efficacy, with of course the advantage of scalability for global distribution. BioNTech retains the right to commercialize the vaccine in Germany, Turkey and certain developing countries, while Pfizer will have global rights elsewhere. As with Comirnaty, both companies will share gross profits from commercialisation of any product from the partnership.

The plan is to update GlaxoSmithKline’s (GSK) Shingrix vaccine which was FDA approved in 2017. The CDC encourages people over 50 to get the Shingrix vaccine as ~1 million people get Shingles annually. The Pfizer release claims that 1 in 3 people in the US are impacted by herpes zoster virus in their lifetime, with 99% of the population having had chickenpox as a child. BioNTech CEO Ugur Sahin noted that cancer patients are at an increased risk of shingles.

The Shingles vaccine is the fourth collaboration between BioNTech and Pfizer for mRNA based viral vaccines, the influenza programs being a collaboration commenced in 2018 concerning mRNA vaccines for influenza. The first Phase 1 trial for an mRNA influenza vaccine was commenced in September last year.

Clearly, the plan is to grow the global market with a new mRNA based vaccine that will hopefully have higher efficacy and better tolerability than existing approved Shingles vaccines. It is clear that the Shingles mRNA vaccine will have a broad global market.

Conclusion

The announcement from Pfizer about acquisition of ReViral is a clear demonstration of how Pfizer CEO Albert Bourla sees Pfizer capitalising on the holistic approach to viral disease that has been so successful for COVID. The ReViral acquisition shows that Pfizer backs itself and puts its capital at risk. Many overlook the fact that Pfizer did not benefit from funds from Operation Warp Speed to develop the COVID vaccine, although it did get a Government agreement to purchase 100 million doses (at least $1.95 billion) subject to Emergency Use Authorization from the FDA. In other words, it took the risk that its development would be successful. On the other hand, BioNTech received a $425 million German Government grant in September 2020 to accelerate its COVID vaccine development. I make the point about Pfizer because it shows confidence and courage in its developments.

There is a lot of traditional analysis of Pfizer available on Seeking Alpha. My take here goes to vision and capacity to execute, which is a forward looking view of the company. I continue to be confident about Pfizer’s future prospects. Of course there is a lot of complexity to a huge pharma company and today’s news of a setback with the FDA concerning Pfizer/Myovant Sciences (MYOV) Supplemental New Drug Application for Myfembree for managing moderate to severe pain associated with endometriosis may have contributed to a small recent fall in Pfizer’s share price. These kinds of events offer opportunity for potential new investors.

I am not a financial advisor but I’ve been a participant in the Biotech industry for a long time. I hope my perspective is useful for you and your financial advisor as you consider possible investment in Pfizer.