It’s been a year since the UK started coming to terms with the pandemic.
On March 16, Prime Minister Boris Johnson asked the nation to stay home as much as possible, escalating to a full national lockdown on March 23.
In a year that has changed the course of history, the healthcare industry has been rocked to its very core.
Elective surgeries, routine appointments and even clinical trials were put on hold; producers of bandages and other medical equipment such as Smith & Nephew PLC (LON:SN.) are experiencing subdued demand to this day.
Patients have been reluctant to attend medical settings, where there are more chances to catch the virus than staying at home, while physicians assess the risks before calling people in.
Although hospitals are experiencing less pressure as the number of COVID-19 cases dwindles down, hospital waiting lists hit record highs.
At the end of January, when daily new cases were around 21,000, 4.6mln patients in England were waiting to begin treatment, with 304,044 of them having been on hold for over a year.
Across the month, the number of people admitted for routine procedures more than halved.
This is because containing the pandemic has been the number one priority for most institutions across the world.
In fact, the quickest companies to address unmet needs have had a stellar year, especially those focused on vaccines since immunising the world seems the only way out of the pandemic.
A shot in the arm
After partnering with US giant Pfizer Inc. (NYSE:PFE), BioNTech became the first company to have developed a COVID-19 vaccine approved by the authorities.
It also became the first-ever mRNA-based drug to be approved for human use.
The pair was followed by Moderna Therapeutics (NASDAQ:MRNA), which is also using mRNA technology, AstraZeneca PLC (LON:AZN) and Johnson & Johnson (NYSE:JNJ), which instead have a traditional DNA formulation.
They have been approved in several EU countries, the US and Australia.
Russia’s vaccine Sputnik V is approved for use in 51 countries, mostly in South America, Asia and Africa, with total population of over 1.3bn.
China has been using the formulations developed by CanSino Biologics, Sinovac and Sinopharm since July on an emergency basis, and it has issued market approval only recently.
While Beijing has yet to approve any foreign jabs, Hong Kong has acquired doses of the inoculations made by Pfizer and AstraZeneca.
The UK has been at the forefront of global rollouts, having administered at least one dose of a COVID-19 vaccine to over 24mln people as of Sunday, with 1.5mln having received the second one as well.
The government has issued a clear plan out of lockdown, with the first businesses allowed to reopen on April 12 after students went back to school on March 8.
Testing, testing…1…2…3…
Looking at the diagnostics sector, the UK is getting hyped about the potential for quick tests to allow the reopening of large-scale events.
These kinds of assays, which are antigen lateral flow, are not as accurate as the slower PCR ones.
“We believe that PCR remains king; however, we see the speed and portability of lateral flow tests as critical in getting the country out of the pandemic phase as a screening mechanism,” analysts at Liberum said in February.
“With companies beginning to develop solutions for low reported ‘real world’ lateral flow sensitivity, we believe the next year will see a boom in lateral flow testing. Its important to note that we would expect any people testing positive with a lateral flow test to follow this up with PCR confirmation.”
Companies offering or developing PCR tests include Novacyt SA (LON:NCYT), Yourgene Health PLC (LON:YGEN) and genedrive PLC (LON:GDR).
The lateral flow tests, instead, are a focus for Avacta Group PLC (LON:AVCT), Omega Diagnostics Group PLC (LON:ODX), Abingdon Health plc (LON:ABDX) and Immunodiagnostic Systems Holdings PLC (LON:IDH).
Meanwhile, Sensyne Health PLC (LON:SENS) is providing its MagnifEye system to LFT producer Excalibur Healthcare Services.
MagnifEye is an AI-powered software to read test results on smartphones; its algorithm detects lines that are difficult to read, including those not visible to the human eye, with the goal to improve accuracy.
As a result, the sector will continue to grow in 2021 as demand for coronavirus testing is not going away any time soon, according to broker finnCap (LON:FCAP).
The market is expected to peak this year but it will remain strong into 2022 and beyond, as it likely that COVID-19 will be a part of our lives for years to come.
Treatment lags
In terms of treatment, the pharma sector hasn’t quite cracked it yet, so we don’t have a go-to treatment that is expected to cure COVID-19.
Hospitals have used medicines normally targeted at other conditions such as corticosteroids, blood thinners and monoclonal antibodies, as well as plasma taken from people who have contracted the virus and recovered from it.
Lists of approved treatment continue to be updated: in January, the UK allowed the use of blood thinners, such as tocilizumab and sarilumab, in addition to corticosteroids, which are the standard of care in the NHS.
Countries such as the US have been using Gilead Sciences Inc’s (NASDAQ:GILD) remdesivir, although the World Health Organisation (WHO) has advised against it because there is currently no evidence that it improves survival or the need for ventilation.
Some companies have focused their efforts on developing medicines for the virus alone: last week, GlaxoSmithKline PLC (LON:GSK) said an independent data monitoring committee recommended stopping the final phase of trials on monoclonal antibody VIR-7831 because it’s very effective, so there should be more news on that soon.
However otilimab, another monoclonal antibody, did not make a significant difference when used to treat patients in addition to standard of care, compared to those receiving standard of care alone, but the study was tweaked to focus on patients aged over 70 after they reported improvement.
AstraZeneca, meanwhile, is in late-stage trials on more than 9,000 participants for AZD7442, a long-acting antibody (LAAB) combination for the prevention and treatment of COVID-19.
In the small-cap world, Tiziana Life Sciences PLC (NASDAQ:TLSA) (LON:TILS) has delivered positive data from a clinical trial of its monoclonal antibody to be delivered through the nose, while Synairgen PLC (LON:SNG) and Evgen Pharma PLC (LON:EVG) are at phase II/III clinical trials for their respective candidates.
Going forward
“The COVID-19 pandemic is placing enormous strain on the global health care sector’s workforce, infrastructure, and supply chain, and exposing social inequities in health and care,” analysts at Deloitte commented in the sector’s outlook for 2021.
“COVID-19 is also accelerating change across the ecosystem and forcing public and private health systems to adapt and innovate in a short period.”
According to the accountant, consumers demand will be in focus to enhance the human experience, while healthcare services will become increasingly digitalised.
Global health care spending is expected to slow down by 2.6% in 2020 due to lockdowns and social distancing measures, however it is estimated to rise by 4% annually over the next four years.
Global health care spending as a share of GDP will likely remain at around 10.3% through 2023, slightly ahead of 2019's ratio, but very unevenly spread, ranging from US$12,703 in the United States to just US$37 in Pakistan in 2024.