3 promising vaccination campaigns to watch out for if smallpox cases surge

On August 14, Dr. Tedros Adhanom Ghebreyesus, Director-General of the World Health Organization (WHO), declared the mpox epidemic a Public Health Emergency of International Concern (PHEIC).

When a disease is designated a PHEIC, such as Ebola, Zika, polio or COVID-19, it typically follows a coordinated international response under the International Health Regulations (IHR) 2005. The legally binding framework covers 196 WHO member states and one of the responses is vaccination.

Although the WHO has tracked more than 17,000 cases largely confined to central Africa, with the latest strain of smallpox dubbed Clade 1, international travel is likely to widen the spread of smallpox. In such a scenario, which pharmaceutical stocks have the capacity to meet demand in the smallpox market?

Bavarian Nordic (OTC: BVNRY)

Available to U.S. investors as American Depositary Receipts (ADRs), Bavarian Nordic is furthest along the path to launching its mpox vaccine, called Jynneos. The FDA first approved Jynneos in September 2019, with emergency use authorization (EUA) expected in August 2022.

Unlike mRNA vaccines, Jynneos follows the traditional vaccine model, derived from a modified cowpox Ankara (MVA) strain that is disabled from replicating in human cells. Targeting both smallpox and monkeypox (mpox), Bavarian Nordic began commercial distribution of Jynneos in April of this year.

About 2 million U.S. residents are eligible for the vaccine, which is said to be 85.9% effective when given in two doses, according to the CDC. In addition to mpox, the Danish biotech company reported a 59% drop in revenue in Q1 2024 compared with the year-ago quarter.

Bavarian Nordic’s product portfolio focuses on travel health, from rabies and tick-borne encephalitis (TBE) to typhoid and cholera vaccines. Of these, Encepur for TBE saw the largest sales growth in Q1, increasing by 44%, while Rabipur for rabies had flat sales year-on-year at ~$36 million.

In the case of mpox demand, Bavarian Nordic expects revenues of up to $445 million in 2024, of which just over half will come from government contracts. BVNRY shares have risen 51% since the beginning of the year, currently trading at $13.39 compared to a 52-week low of $5.95 and a high of $14.74 per share.

Emergent BioSolutions (NASDAQ: EBS)

The Maryland biopharmaceutical company developed the live vaccine ACAM2000, first approved by the FDA in August 2007 for smallpox. Considered superior to Dryvax, ACAM2000 replaced it in the U.S. Strategic National Stockpile.

However, given that ACAM2000 is a live vaccine, the CDC considers it riskier for immunocompromised individuals than non-replicating Jynneos. So much so that the Advisory Committee on Immunization Practices (ACIP) replaced ACAM2000 with Jynneos in November 2021.

Still, Emergent BioSolutions stock has quickly exited penny stock territory, up 336% since the beginning of the year. In addition to the mpox scare, the company landed a $250 million contract in July from the Administration for Strategic Preparedness and Response (ASPR). That includes Cyfendus for anthrax, ACAM2000 for smallpox, and APSR with VIGIV for botulism.

That put Emergent BioSolutions in the spotlight as a biodefense fiduciary, more so than its potential ACAM2000 shipments for mpox. In Q2 earnings ending June 30, the company reported a 25% drop in revenue, but improved its year-over-year net loss by 39%.

Sales of the company’s Narcan nasal spray accounted for the majority of revenue of $120 million out of total sales of $183.4 million, down 10% from the year-ago quarter. Currently trading at $11.38, EBS shares are nearly three times their 52-week average of $4.06 but still below their 52-week high of $15.10 per share.

SIGA Technologies Inc. (NASDAQ: SIGA)

New York-based SIGA Technologies is a potential mpox target. While the company does not currently offer a vaccine, it does have an FDA-approved oral antiviral drug called tecovirimat (TPOXX or ST-246) for a broader range of orthopoxviruses, including mpox.

However, given that the controversial introduction of COVID-19 vaccines has significantly undermined confidence in vaccines as a concept, SIGA’s vaccine-free approach may prove more fruitful. As of August 15, the PALM 007 SIGA study of tecovirimat demonstrated a strong safety profile while being superior to placebo in mitigating MPox changes.

“We are very pleased with the results of the PALM 007 study, which showed that tecovirimat is safe and offers potential benefit to important groups of patients with MPox disease, particularly those with severe disease and those who present early for treatment.”

Diem Nguyen, CEO of SIGA Technologies

Like Emergent BioSolutions, SIGA secured a slew of Project Bioshield Act contracts for its TPOXX drug last year, worth $113 million. The company reported significantly improved product sales in its second-quarter earnings, rising from $1.3 million in Q2 2023 to $20.7 million. At the same time, SIGA entered the break-even zone with net income of $1.8 million, compared with a net loss of $2.9 million in the same quarter a year earlier.

Having beaten earnings per share estimates for the past three consecutive quarters, SIGA stock is up 73% year to date. Compared to its 52-week average of $6.58, SIGA is currently trading at $10.16, still below its 52-week high of $12.83 per share.

Do you think mpox will be boosted by media in the coming months? Let us know in the comments below.

Disclaimer: The author does not own or have a position in any of the securities discussed in the article.

About the author

Tim Fries is the co-founder of The Tokenist. He holds a BS in Mechanical Engineering from the University of Michigan and an MBA from the University of Chicago Booth School of Business. Tim was a senior associate in the investment team at RW Baird’s US Private Equity practice and is a co-founder of Protective Technologies Capital, an investment firm specializing in sensor, protection and control solutions.