Despite the gradual lifting of lockdown, effective testing and treatment remains a crucial part of managing the long-term impact of coronavirus. The Association of Investment Companies (AIC) has spoken to investment company managers to find out which holdings are developing vaccines, tests and treatments.
Annabel Brodie-Smith, Communications Director of the Association of Investment Companies (AIC), said: “Whilst the extra freedom of the past few weeks has been a welcome respite as lockdown has begun to be lifted, there’s still a long way to go. Many people are still receiving treatment for COVID-19 and testing is a key part of the government’s plan to combat the next stage of the crisis. It’s encouraging to see how investment companies’ portfolio companies are helping, whether that’s searching for a vaccine, developing treatments or producing antibody tests which can be used at home.”
Dr Trevor Polischuk, Co-Manager of Worldwide Healthcare Trust, said: “In the vaccine space, CanSino Biologics is leading the China-based efforts to create a vaccine, with the recent promise to share any breakthroughs universally if successful. In the US, Pfizer, among others, will likely have data near term on their vaccine initiatives as well. We expect the news flow related to COVID-19 therapies, diagnostics, and vaccines to be copious throughout 2020 and this should significantly impact lives, markets, and stocks alike.”
Alexandra Lindsay, Investment Director responsible for Mologic* at Calculus VCT, said: “Calculus VCT portfolio company Mologic, a leading developer of diagnostic technologies, has joined forces with self-testing experts BioSure to produce a COVID-19 antibody self-test. The innovative design has been proven to be extremely easy to use, requires only a fraction of a drop of blood and gives the user their own result in just ten minutes. The antibody self-test will be ready for mass production at the beginning of June. It will be available to the UK and global markets and will also be available to be directly purchased by end consumers. The team has worked tirelessly to develop a quality rapid diagnostic test in a short space of time. It is impressive that this test is now extremely close to being on the market following the partnership with BioSure.”
Joe Bauernfreund, Portfolio Manager of AVI Global Trust, said: “Kinnevik is one of our top ten holdings. Kinnevik's purpose is to invest in the power of technology to make life better. They have a strong focus on the healthcare sector and own a 16% stake in Babylon, a digital healthcare service company combining mobile technology and artificial intelligence with medical expertise. Babylon has recently launched a finger prick blood test that identifies people previously infected with COVID-19. It is exciting and rewarding to see our portfolio companies helping to find solutions for COVID-19.”
Jamie Ross, Fund Manager of Henderson EuroTrust, said: “We see limited disruption to Roche’s business from COVID-19 and, in fact, see a few ways in which the company could benefit. First, diagnostic testing is likely to become increasingly prevalent as a result of COVID-19. Roche has a very large diagnostics business and is well placed to benefit. In a specific response to COVID-19, Roche launched its SARS-CoV-2 IgG antibody test at the start of May and they are already selling this to customers. They expect to produce high double-digit millions of tests in May and this production capacity will grow as the year goes on. Roche are also looking into the development of other COVID-19 diagnostics tests using different technologies.”
David Turner, Senior Investment Manager at Foresight Group, advisor to Foresight VCT and Foresight 4 VCT, said: “Biofortuna, a portfolio company of Foresight VCT and Foresight 4 VCT, is acting as a contract manufacturer for two global customers to deliver laboratory-use tests for COVID-19 and is also assembling testing kits that are distributed to service laboratories. Biofortuna has scaled up its laboratory infrastructure significantly over recent weeks to meet demand and throughput is now in excess of four million tests per week. The company has also doubled its workforce, with 15 new members of staff joining in the last three weeks.”
Tim Creed, Fund Manager of Schroder UK Public Private Trust, said: “Benevolent AI and Oxford Nanopore are two British companies using the latest cutting-edge technology to research and understand COVID-19. Benevolent AI creates and applies artificial intelligence and machine learning to accelerate the drug discovery process and the technology has been providing important insights in the global effort to combat the COVID-19 outbreak. Oxford Nanopore has developed a new generation of DNA sequencers. The firm is providing support on the frontline of the coronavirus outbreak through their MinION sequencers, which allow rapid and decentralized genome sequencing, enabling better understanding of the disease and its development, including potential mutations.”
Alasdair McKinnon, Manager of The Scottish Investment Trust, said: “Some businesses are better placed than others to defeat the virus. Take Gilead Sciences, one of The Scottish’s pharmaceutical investments, as an example. As the pandemic unfolded, it became clear that no proven treatments for the disease existed; addressing the symptoms was the best that could be expected. However, Gilead realised that remdesivir, a drug developed in the fight against Ebola, might also be effective against COVID-19. Development and approval of new drugs generally take years, but the pharmaceutical industry and government agencies have massively accelerated the process such that promising drugs can be approved in weeks, including Gilead’s remdesivir. It doesn’t claim to be, and no one expects, a miracle cure, but it might provide respite for some patients who are battling for their lives.”
Dr Trevor Polischuk, Co-Manager of Worldwide Healthcare Trust, said: “Whilst the investment objective of the company is not solely to pursue the next cure or vaccine, we have many portfolio companies that have joined the battle against COVID-19. Novartis has led the philanthropic pathway with the commitment to donate up to 130 million doses of hydroxychloroquine to treat symptoms of COVID-19. Gilead Sciences has led the news cycle with the first Emergency Use Authorization by the FDA for remdesivir to treat hospitalized COVID-19 patients. Takeda is leading a global alliance of blood plasma companies to develop a plasma-derived therapy from recovered COVID-19 patients not only to treat infected patients but also for prophylactic use.
“Chugai is conducting global phase three trials of their already approved rheumatoid arthritis drug, Actemra, to determine if reducing the ‘cytokine storm’ helps to prevent patients from succumbing to the most severe lung complications of COVID-19. Similarly, Alexion has recently announced plans to initiate a global phase three study to investigate their own already marketed drug, Ultomoris, in COVID-19 patients who are hospitalized with severe pneumonia or acute respiratory distress syndrome.”
Jamie Ross, Fund Manager of Henderson EuroTrust, said: “Roche has a product called Actemra which is already approved to treat arthritis amongst other conditions. This product is currently being tested for its use in severe COVID-19 cases and the early indications are encouraging; there is more data to follow in June. Given that this product is already approved for use, it could theoretically be quickly rolled out if the data is positive.”
Mobile x-rays for the NHS
James Livingston, Partner at Foresight Group, advisor to Foresight VCT and Foresight 4 VCT, said: “Across our VCT portfolio, we have many examples of companies going out of their way to support the NHS through the present crisis. For example, Belfast, Dublin and Nottingham-based Hospital Services Group Limited (HSL), which Foresight VCT and Foresight 4 VCT invested into in 2015, has been providing mobile x-ray equipment and also home reporting equipment. This allows scans to be read at remote workstations as they would in a hospital environment. HSL has also been delivering consignments of face shields to give healthcare workers added protection when dealing with COVID-19 patients.”
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- *Mologic is also owned by Foresight VCTs.
- The Association of Investment Companies (AIC) was founded in 1932 to represent the interests of the investment trust industry – the oldest form of collective investment. Today, the AIC represents a broad range of closed-ended investment companies, incorporating investment trusts and other closed-ended investment companies and VCTs. The AIC’s members believe that the industry is best served if it is united and speaks with one voice. The AIC’s mission statement is to help members add value for shareholders over the longer term. As at the end of April, the AIC had 362 members and the industry had total assets of approximately £191 billion.
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