mRNA and Antisense biotech - attracting the large fund managers and defining 2020
Updated: Jan 26
As the 2020 year of biotech investing draws to a close, mRNA technology stands out as the defining technology of the decade.
Never before have mRNA vaccines — such as the two-dose Pfizer/BioNTech and Moderna vaccines that have now received emergency use authorization from the FDA — been approved for use for treatment of any diseases.
Before COVID-19 Moderna and BioNtech had built platforms that, in theory at least, could be used to create a vaccine for any infectious disease simply by inserting the right mRNA sequence for that disease.
Then COVID-19. Within weeks of identifying the responsible virus, scientists in China had determined the structure of all of its genes, including the genes that make the spike protein, and published this information on the Internet.
Then in Europe companies began working on the design of an mRNA vaccine. Within weeks, they had made enough vaccine to test it in animals, and then in people. Just 11 months after the discovery of the SARS-CoV-2 virus, regulators in the United Kingdom and the US confirmed that an mRNA vaccine for COVID-19 is effective and safely tolerated, paving the path to widespread immunization. Previously, no new vaccine had been developed in less than four years.
This will revolutionise biotechnology for ever.
Traditional vaccines work typically to fight the disease with antigens as, for instance, bits of inactivated virus or purified molecules. mRNA vaccines work differently. They don't contain antigens. Instead, they contain a blueprint for the antigen in the form of genetic material — that's the mRNA.
Antisense therapy uses antisense oligonucleotides (ASO's) to target messenger RNA (mRNA). ASO's are capable of altering mRNA expression through a variety of mechanisms.
Evotec SE and antisense
In August 2020, Secarna Pharmaceuticals GmbH & Co. KG (“Secarna”) announced a strategic partnership in the field of antisense oligonucleotide (“ASO”)-based therapeutics with Evotec SE.
Antisense therapy is an innovative, clinically and commercially validated, highly-targeted pharmacological approach which interferes with gene expression in the cells of interest to specifically inhibit the production of proteins which promote development and progression of diseases.
Seccarna brands itself as a next-generation antisense drug discovery company, combining its proprietary LNAplus™ platform with cutting edge third generation LNA-chemistry to generate molecules with significantly improved potency and a comprehensive safety profile against targets that are difficult to regulate or currently not druggable with alternative approaches.
Secarna’s antisense molecules are precisely engineered to specifically bind to the targeted RNA of the gene of interest. Additionally, they are pre-screened and selected because of their high potential for activity. As a result, there is little to no need for lead optimisation which significantly speeds up the discovery and development process compared to conventional therapeutic approaches.
The company has development programs that include immuno-oncology, immunology, opthalmology, viral-neurodegenerative and cardio-metabolic diseases where antisense based approaches show clear benefits when compared to other therapeutic approaches. The company is the leading independent European antisense drug discovery and development company.
In Europe collaboration between biotech companies is seen as a way of adding value in a win/win patient/stakeholder outcome. October 2020 saw a collaboration announced between Denali Therapeutics Inc. and Secarna Pharmaceuticals.
Denali is a biotechnology company focused on the discovery and development of therapies for patients with neurodegenerative diseases such as Alzheimer’s disease, Parkinson’s disease, ALS, and others. The companies will leverage Secarna’s antisense oligonucleotide (ASO) discovery and development platform LNAplus and Denali’s blood-brain barrier technology to discover and develop novel therapies and treatments for neurodegenerative diseases with high unmet needs.
Fund managers, high net wealth investors and global biotech investing
Platinum International Healthcare Fund has backed a number of biotechs in the mRNA space including BioNTech and Moderna. Dr. Ogden, the fund's manager, sees a widening application for mRNA ..."I look for the longer term for example cancer and mRNA", she said.
According to a recent article in the Australian Financial Review (10 November 2020) Platinum first brought into BioNTech at the pre-IPO stage in 2019 with shares at $US 15. They close the 2020 year at around $US 86. According to Dr. Ogden "mRNA technology has really put itself on the map now".
One of the world's most savvy investors has been Ballie Gifford Global Stewardship Fund with a 56 per cent return over one year to September 30 2020. The Scottish fund invests over EUR 300 billion globally.
Baillie Gifford has 7.2 million shares in Moderna, according to Bloomberg data, and their value has soared from $139 million at the start of the year to US $993 million in December 2020.
Baillie Gifford is best known for its bets in Tesla, where it is the largest external investor and has made more than $12 billion from the shares, according to Citywire.
Baillie Gifford is the biggest non-US investor. It traces its roots to the century-old investment trust Scottish Mortgage Investment Trust, but its stock picks are anything but old fashioned.
Baillie Gifford is not the only fund investing into life sciences and healthcare investments with significant money and long-term views.
Sovereign wealth funds such as Singapore-based Temasek are also increasingly joining syndicates in biotech companies such as Alzheimer’s therapeutics developer TauRx, also based in Singapore, as well as U.S.-based companies such as gene editing-focused biotech Homology Medicines and primary care-focused healthcare play Iora Health.
Two of the biggest investments in mRNA are the German billionaire twins – Thomas and Andreas Struengmann. The pair helped BioNTech with around €150 million seed funding in 2008. This was after they sold their generic drug business for around €5.5 billion. This investment increased to around €7 billion in 2020.
CureVac which bills itself as “truly one-stop shop for mRNA” also has some impressive investors. The company’s largest shareholder is German billionaire Dietmar Hopp who made is money as co-founder of enterprise software company SAP with a net worth of around €11 billion.
What is interesting about CureVac is the merging of biotech and technology into a life science IT platform that can use mRNA sequences to write a new code that can be translated to the human body to the corresponding protein. This gives companies such as CureVac the possibility to use the same, standardised processes to produce all their mRNA therapeutics. The company currently has 693 granted patents and counts Bill and Melinda Gates as investors.
For Australian fund manager, Michael Frazis, Moderna represents a platform technology company as he recently told Australian Financial Review "Moderna is now a platform company...medical science is now data science. So all they have to do is change the code on their computers, which is now specific to the spike protein on coronavirus. They can change that to anything else and there's a good chance they'll be able to develop a vaccine for that. This is a process that can be used in many different indications". Frazis fund is up 110% as at 31 December 2020.
The companies to invest in 2021
We expect the following companies to attract significant global ESG and impact investor interest in 2021