Catalent Could Be Big COVID-19 Vaccine Play: The Thing Behind The Thing

Shares of Catalent Inc CTLT 1.46% hit new 52-week highs on Wednesday and again on Thursday after reporting first-quarter earnings and raising full-year guidance. The company could have more upside as a backdoor way to play several companies working on COVID-19 vaccines.

COVID-19 Vaccines: Catalent is a company involved in the development and manufacturing of drugs, biologics, gene therapies and consumer health products.

The company has contracts in place with Moderna Inc MRNA 1.55%, AstraZeneca AZN 1.03% and Johnson & Johnson JNJ 1.84% for their COVID-19 vaccines.

The deals with Moderna, AstraZeneca and Johnson & Johnson cover vial filling, packaging and staffing for the production of the vaccines. The deals with Moderna and AstraZeneca were each worded with 100 million or more doses.

All three of these company’s candidates are part of the U.S. government’s Operation Warp Speed program.

Having deals in place with three of the lead candidates for a COVID-19 vaccine make Catalent a great way to invest in “the thing behind the thing,” as the company could benefit from approvals from its partners with manufacturing plans in place.

The important thing for investors to consider with the stock at 52-week highs is current guidance does not assume marketing approval for any of the COVID-19 vaccines. If one is approved, the guidance and share price of Catalent could rapidly change.

Manufacturing: Catalent has made several acquisitions and purchases to scale up its manufacturing capacity.

The company began ramping up manufacturing capabilities prior to the COVID-19 pandemic but is now aggressively expanding to help cover the high number of vials that will be needed.

Catalent’s Bloomington factory has seen several investments over the last two years and will have high-speed filling capacity for three vial lines in the future.

By April 2021, Catalent will be able to produce 80 million vials a year from its Bloomington factory.

Financials: Catalent reported first-quarter revenue of $845.7 million, up 27% year-over-year.

The Biologics segment saw year-over-year growth of 100% to $377.1 million. This segment made up 44% of revenue and had impressive growth from the COVID-19 partner revenues.

The company’s goal is to get its Biologics division to 50% of revenue and it's reaching that total faster than expected.

On its earnings call, Catalent said outside of the COVID-19 partnerships, the company still had double-digit year-over-year growth in the third quarter.

“New demand related to potential COVID-19 vaccines and treatments, were partially offset by headwinds in our softgel and oral technologies and oral and specialty delivery segments,” said CEO John Chiminski.

In the last fiscal year, Catalent reported year-over-year revenue growth of 24% to $3.09 billion.

Catalent raised its full-year guidance on the first-quarter call. The company now expects full-year revenue to be in a range of $3.58 billion to $3.78 billion. This is up from prior guidance of $3.45 billion to $3.60 billion.

Benzinga’s Take: With several companies working on COVID-19 vaccines, it can be hard to predict a winner. Several of them have faced setbacks and it seems a different company is leading the race every week.

Trading or investing Catalent provides a couple of shots on goal for a winning investment in the COVID-19 vaccine race. The company is involved in more than 60 compounds and has diversity aside from COVID-19 vaccines.

Aside from the COVID-19 vaccine, the company acquired Paragon Bioservices, a company in the gene therapy market with signed contracts in place.

The company was added to the S&P 500 on Sept. 21 and could be getting more investor eyes on it as well.

https://www.benzinga.com/news/earnings/20/11/18241008/catalent-could-be-a-big-covid-19-vaccine-play-the-thing-behind-the-thing 

Ocular Therapeutics Q3 smasher, revenue surges on drug for ocular inflammation, pain

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• DEXTENZA net product revenue was $5.4M, a 280% increase Q/Q.
• R&D expenses were $7M vs. $10.2M for Q3 2019.
• October financing raised $75.2M in proceeds net of fees.
• Net loss of $11.9M and GAAP EPS of -$0.21, beats by $0.02.
• Estimated Q4 EPS of -$0.21 and revenue of $11.29M.
• DEXTENZA^®’s momentum continues as a result of key initiatives implemented earlier in the year and exemplified by a robust 280% increase over the prior quarter. This momentum has continued into the fourth quarter with nearly 4,200 billable inserts sold to ASCs and HOPDs in the month of October. Within our pipeline, we have four clinical-stage programs that are each highly differentiated ophthalmology specialty products in markets where current annual global sales are estimated to exceed $20 billion. Each of these programs address the key unmet need in the indication it is targeting. With an improved cash position following the completion of a successful financing in October and the recently concluded license agreement with AffaMed Therapeutics, we believe we are now in a position to fund each of these four planned programs through its respective read-out of Phase 2 clinical trial data to capture the full potential benefit of the Phase 2 value inflection.” mentions CEO and president Antony Mattessich.
• https://seekingalpha.com/news/3633246-ocular-therapeuticsplus-9_2-q3-smasher-revenue-surges-on-drug-used-for-ocular-inflammation
  

Biogen shares halted pending Ad Com vote on Alzheimer's drug

• Nasdaq has suspended trading in Biogen (NASDAQ:BIIB) pending the release of news, in this case the outcome of today's FDA advisory committee meeting on its marketing application for Alzheimer's disease med aducanumab.
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• https://seekingalpha.com/news/3633224-biogen-shares-halted-pending-ad-com-vote-on-alzheimers-drug
  
  

HIV drug combo doesn't cut it for Covid-19

Study Authors: Peter W. Horby, Marion Mafham, et al.; Bin Cao, Frederick G. Hayden

Target Audience and Goal Statement: Infectious disease specialists, pulmonologists

The goal of this study was to examine the clinical effects of lopinavir-ritonavir, a coformulated HIV-1 protease inhibitor, in patients hospitalized with COVID-19.

Question Addressed:

• Did patients hospitalized with COVID-19 derive a clinical benefit from taking an HIV drug combination?

Study Synopsis and Perspective:

As the COVID-19 death toll ticks upward, well beyond the one million mark, researchers continue to intensify efforts to find effective treatments for both mild and moderate-to-severe disease.

The viral RNA-dependent RNA polymerase inhibitor remdesivir has shown little or no impact on the survival of hospitalized patients with COVID-19, according to a World Health Organization (WHO) trial. The antimalarial hydroxychloroquine fell flat as a treatment and prophylaxis strategy against COVID-19. Only the steroid dexamethasone has been found to help patients with severe COVID-19, defined as patients with high oxygen requirements and need of a ventilator.

Action Points

• Treatment with lopinavir-ritonavir did not reduce 28-day mortality or the risk of progressing to invasive mechanical ventilation in hospitalized patients with COVID-19, according to the randomized RECOVERY trial.
• Note that the results were consistent across all prespecified subgroups, including age, sex, ethnicity, duration of illness, degree of respiratory support at baseline, and predicted mortality risk.

According to results from the U.K.-based RECOVERY trial, recently published in The Lancet, lopinavir-ritonavir did not reduce mortality or speed up recovery from COVID-19.

Mortality at 28 days was 23% among the hospitalized COVID-19 patients randomized to lopinavir-ritonavir compared with 22% in the usual care group (rate ratio [RR] 1.03, 95% CI 0.91–1.17), reported Peter Horby, MD, PhD, of the University of Oxford in England, and colleagues.

RECOVERY -- one of the world's largest efforts to find effective COVID-19 treatments currently underway at 176 U.K. hospitals -- was the first large-scale randomized clinical trial to report the effects of lopinavir-ritonavir in patients hospitalized with COVID-19. The results also confirmed those of an earlier smaller trial from China that showed no improvement in viral load, duration of hospital stay, or mortality with the combination in patients hospitalized with COVID-19.

"Treatment of COVID-19 with the drug combination lopinavir-ritonavir has been recommended in many countries. However, results from this trial show that it is not an effective treatment for patients admitted to hospital with COVID-19," said Martin Landray, MBChB, PhD, of the Nuffield Department of Population Health at the University of Oxford, who co-leads the RECOVERY trial. "Since our preliminary results were made public on 29 June, the WHO has halted lopinavir-ritonavir treatment groups involved in its SOLIDARITY trial and reported that their interim results are in line with those presented here."

In this randomized, controlled, open-label, platform trial, patients admitted to the hospital with COVID-19 (mean age 66.2 years) were randomized to receive lopinavir-ritonavir (n=1,616) or usual care (n=3,424). Patients in the active intervention arm received 400 mg of lopinavir and 100 mg of ritonavir orally every 12 hours for 10 days or until discharge, if sooner.

The primary outcome was 28-day all-cause mortality. Time to discharge from hospital and cause-specific mortality were included among the numerous secondary and prespecified subsidiary clinical outcomes.

In addition to the main outcome, the risk of needing a ventilator did not differ between the groups, with 10% of those on lopinavir-ritonavir requiring ventilation versus 9% of those who received usual care.

Both groups had a median hospital stay of 11 days and also had a similar probability of being discharged alive from the hospital within 28 days (RR 0.98, 95% CI 0.91-1.05).

The researchers noted that the results were consistent across all prespecified subgroups, including age, sex, ethnicity, duration of illness, degree of respiratory support at baseline, and predicted mortality risk.

Study limitations included the absence of information on non-serious adverse reactions/reasons for stopping treatment, as well as physiological, laboratory, and virological parameters. In addition, very few intubated patients were enrolled, "as there were difficulties in administering treatment to patients who could not swallow."

Source References: The Lancet 2020; DOI: 10.1016/S0140-6736(20)32013-4

Editorial: The Lancet 2020; DOI: 10.1016/S0140-6736(20)32078-X

Study Highlights and Explanation of Findings:

Among RECOVERY trial participants hospitalized with COVID-19, there were no differences between patients assigned to lopinavir-ritonavir versus usual care in the primary outcome of 28-day all-cause mortality or key secondary clinical outcomes, including duration of hospital stay and the proportion of patients discharged alive from the hospital within 28 days.

The trial "provides a more solid evidence base regarding possible lopinavir-ritonavir treatment effects" than the prior 199-patient trial from China, with similar findings and interim results from the WHO Solidarity trial, noted Bin Cao, MD, of the National Clinical Research Center for Respiratory Diseases in Beijing, and Frederick Hayden, MD, of the University of Virginia School of Medicine in Charlottesville, in an accompanying editorial.

Those earlier results along with the drug's well-documented adverse effects and drug interactions led to a National Institute of Health recommendation against lopinavir-ritonavir use for hospitalized COVID-19 patients outside of clinical trials.

The many other clinical care guidelines that have recommended lopinavir-ritonavir should now be updated, Horby's group urged.

Still, early antiviral treatment could be worth testing for mild cases of COVID-19 or post-exposure prophylaxis in high-risk populations, noted Cao and Hayden.

"Given the efficient replication of SARS-CoV-2 shortly after infection and the association between mortality and viral RNA loads at diagnosis, it is possible that early use of sufficiently potent antiviral drugs would be an important determining factor in clinical outcomes, although few early intervention trials have been completed," they wrote.

Also, they argued, antiviral and immunomodulator combinations should be studied, since monotherapy might not be enough for moderately to severely ill patients admitted to the hospital with COVID-19.

"The result from the RECOVERY trial is clear. When combined with findings from an earlier, smaller trial and with the WHO interim results, this provides strong evidence that lopinavir-ritonavir is not an effective treatment for patients hospitalized with COVID-19," said Horby in a statement. "Whilst it is disappointing that there was no significant benefit from lopinavir-ritonavir for patients in hospital, these findings have allowed us to focus our efforts on other promising treatments, and have informed the way in which individual patients are treated."

Last Updated October 21, 2020

Reviewed by Robert Jasmer, MD Associate Clinical Professor of Medicine, University of California, San Francisco

Primary Source

The Lancet

Source Reference: RECOVERY Collaborative Group "Lopinavir-ritonavir in patients admitted to hospital with COVID-19 (RECOVERY): a randomised, controlled, open-label, platform trial" Lancet 2020; DOI: 10.1016/S0140-6736(20)32013-4.

Secondary Source

The Lancet

Source Reference: Cao B, Hayden FG "Antiviral monotherapy for hospitalised patients with COVID-19 is not enough" Lancet 2020; DOI: 10.1016/S0140-6736(20)32078-X.

Additional Source

MedPage Today

Source Reference: Phend C "Kaletra Again Fails for Moderate-to-Severe COVID-19" 2020.

https://www.medpagetoday.org/infectiousdisease/covid19/89216