STOCKS FELL ON A VOLATILE DAY ON WALL STREET
Uncertainty around the coronavirus outbreak and an oil price war fueled a stock market sell off on 9 March that temporarily halted trading – and pharmaceutical stocks felt the blowback as much other industries. Drug ingredient supply disruptions, workforce health, manufacturing operations and global clinical trials are key concerns for the industry as COVID-19 spreads in Asia, Europe and the US.
The S&P 500 opened the day down 3.6%, the Dow Jones Industrial Average opened 3.3% lower, the Nasdaq composite index opened 7.2% lower. The Nasdaq Biotechnology Index (NBI) opened the day down 5.9%. Those losses persisted throughout the day, as did the losses for individual drug companies, with the NBI closing down 6.8%, which was in line with the broader Nasdaq, but better than the Dow's 7.8% drop. (See table below for big pharma performance.)
Most drug makers say they are experiencing minimal disruptions but are taking a day-by-day approach to business operations, monitoring the fast-changing global health crises.Biogen is one company that has been impacted, after a company business meeting in Massachusetts was the center of a COVID-19 outbreak, in which some 27 people associated with the biotech are suspected of having the virus. (Also see "Biogen Linked To More Coronavirus Cases In Boston" - Scrip, 9 Mar, 2020.)
Some of those employees were at the Cowen Healthcare Conference in Boston in March, which raised more concerns across the industry. Some large industry meetings were cancelled including the American College of Cardiology Scientific Sessions and World Heart Federation’s Congress of Cardiology that were scheduled to take place jointly in Chicago from 28 to 30 March.
Agency won't say whether patient-focused drug development meeting and gene therapy conference were postponed because of COVID-19, but other meetings remain as scheduled.
The American Association for Cancer Research (AACR) said its annual meeting in April is still on, for now, but that it is continuing to review the situation and is exploring options such as virtual presentations or postponing the meeting. Many drug companies and cancer research centers have put travel restrictions in place to limit employee travel, AACR noted.
Some upcoming US Food and Drug Administration meetings have been cancelled, but it is not clear that COVID-19 is the reason.
Pharma companies sought to reassure investors and the public that their drug supplies are not currently impacted by the outbreak of the virus.
"While supply and demand vary by product, we are not aware of any significant near-term impacts on the availability of our medicines and vaccines,"Merck & Co. Inc. said in a statement. "We have also assessed potential longer-term impacts. The situation is fluid but at this point we do not anticipate impacts to our supply chain unless disruption due to the COVID-19 outbreak is sustained over several months."
Other pharmaceutical manufacturers posted similar disclosures. Johnson & Johnson said it has a robust business continuity plan in place to protect its global supply chain from unforeseen events.
"These steps include maintaining critical inventory at major distribution centers away from high-risk areas and working with external suppliers to support our preparedness plans," J&J said in a statement. "We currently have sufficient inventory for critical patient needs and are working diligently to minimize patient, customer and consumer impact."
Vertex Pharmaceuticals Inc. said the outbreak has not had an impact on its supply chain for providing its cystic fibrosis medicines to patients or changed its 2020 business outlook, including the launch of Trikafta (elexacaftor/tezacaftor/ivacaftor).
"Vertex has constructed supply chains for its marketed medicines to ensure readiness for a wide variety of contingencies," the firm said in a statement. "Vertex has built significant safety stock into its supply chain to manage potential disruptions and also has secured second source suppliers that are geographically diverse."
On the issue of drug supply, both the European Medicines Agency and the US Food and Drug Administration have said they are monitoring potential drug shortages resulting from supply constraints related to the COVID-19 outbreak. (Also see "Stark COVID-19 Drug Shortages Warning From Senior EU Regulator" - Pink Sheet, 6 Mar, 2020.)
Some drug makers began guiding employees to work from home.Takeda Pharmaceutical Co. Ltd. recommended all employees work from home when possible starting immediately. "Our goal is to reduce the number of people at our sites, which in turn will reduce the risk of exposure for the employees working from home as well as those who must come into the office," the company said.
Biogen also said it implemented a work-from-home policy for employees in Massachusetts, Research Triangle Park, NC, and Barr, Switzerland.
Several drug makers, including Amgen Inc. and Bristol-Myers Squibb Co. said they are supporting employees who need to work remotely, and encouraging them to stay home if they feel unwell.
"We have put in place a number of measures to protect against the transmission of COVID-19 on our campuses, while continuing the critical work required to get our medicines to those who need them," Genentech told Scrip.
Those measures include encouraging employees who are able to work from home to do so, implementing social distancing and enhanced cleaning measures on the Roche subsidiary's campuses, restricting domestic and international air travel to trips that support business continuity, cancelling or postponing large internal meetings, and suspending visits from non-employees and conducting virtual meetings instead.
"We have robust business continuity and mitigation strategies in place and we are not currently experiencing medicine supply issues related to COVID-19 nor are we experiencing impact on the continuity of our Roche and Genentech clinical trials," Genentech said. "We are continuing to monitor and evaluate the evolving situation very closely."