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On August 14th, Dr Tedros Adhanom Ghebreyesus, director-general of the World Health Organization (WHO), declared the mpox outbreak a public health emergency of international concern (PHEIC). 

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

Although WHO tracked over 17,000 cases largely contained to central Africa, with the latest pox strain dubbed Clade 1, international travel will likely widen the pox spread. In that scenario, which pharmaceutical stocks have the capacity to meet the pox market demand?

Bavarian Nordic (OTC: BVNRY)

Available to US investors as American Depositary Receipts (ADR), Bavarian Nordic is furthest on the track to deploy mpox vaccine called Jynneos. The FDA first approved Jynneos in September 2019, gaining emergency use authorization (EUA) in August 2022. 

Unlike mRNA vaccines, Jynneos follows the traditional vaccine model, coming from the modified vaccinia Ankara (MVA) strain that is disabled from replicating in human cells. Aimed at both smallpox and monkeypox (mpox), Bavarian Nordic began to commercially roll out Jynneos this April.

According to the CDC recommendation, around 2 million US residents are eligible for the vaccine, purportedly to have 85.9% mpox effectiveness if given in two doses. Outside of mpox, the Danish biotech firm reported a 59% decline in Q1 2024 revenue compared to the year-ago quarter.

Bavarian Nordic’s product lineup is centered on travel health, from rabies and tick-borne encephalitis (TBE) to typhoid and cholera vaccines. Of those, Encepur for TBE recorded the most sales growth in Q1, increasing by 44%, while Rabipur for rabies had consistent year-over-year sales of ~$36 million.

For the mpox demand, Bavarian Nordic expects up to $445 million revenue in 2024, of which just over half is from government contracts. Year-to-date, BVNRY stock is up 51%, currently priced at $13.39 against the 52-week low of $5.95 and high of $14.74 per share.

Emergent BioSolutions (Nasdaq: EBS)

This Maryland biopharma company developed ACAM2000 live vaccine, first FDA-approved in August 2007 for smallpox. Having been deemed as superior to Dryvax,ACAM2000 replaced it for the US Strategic National Stockpile.

However, given that ACAM2000 is a live vaccine, the CDC views it as 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. 

Nonetheless, Emergent BioSolutions stock rapidly exited penny stock territory, up 336% year-to-date. Alongside mpox concerns, the company gained a $250 million contract from the Administration for Strategic Preparedness and Response (ASPR) in July. This includes Cyfendus for anthrax, ACAM2000 for smallpox, and APSR with VIGIV for botulism. 

This put Emergent BioSolutions on the investor spotlight as a biodefense trustee, more so than its potential supply of ACAM2000 for mpox. In Q2 earnings ending June 30th, the company reported 25% revenue decline but improved year-over-year net loss by 39%.

The firm’s Narcan nasal spray sales comprised the bulk of the revenue at $120 million out of a total of $183.4 million in sales, representing a 10% decline vs the year-ago quarter. Presently priced at $11.38, EBS stock is nearly 3x against the 52-week average of $4.06, but still under its 52-week high of $15.10 per share.

SIGA Technologies Inc. (Nasdaq: SIGA)

Based in NYC, SIGA Technologies is a prospective mpox exposure. While the company doesn’t currently have a vaccine on offer, it does have FDA-approved oral antiviral drug treatment called tecovirimat (TPOXX or ST-246) for the wider range of orthopoxviruses including mpox. 

However, considering that the controversial rollout of COVID-19 vaccines significantly eroded the confidence in vaccines as a concept, SIGA’s non-vaccine approach may prove to be more fruitful. As of August 15th, SIGA’s PALM 007 study on tecovirimat showed a strong safety profile while being superior to placebo in alleviating mpox lesions.

“We are highly encouraged by the PALM 007 study results 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 sought treatment early.”

Diem Nguyen, SIGA Technologies CEO

Similar to Emergent BioSolutions, SIGA secured multiple government contracts last year for its TPOXX drug under The Project Bioshield Act, worth $113 million. In Q2 earnings, the company showed markedly improved product sales, going up from $1.3 million in Q2 2023 to $20.7 million. At the same time, SIGA entered the profitability zone with $1.8 million net income compared to $2.9 million net loss in the year-ago quarter.

Having beaten earnings per share estimates for the last three consecutive quarters, SIGA stock is up 73% year-to-date. Against the 52-week average of $6.58, SIGA is currently priced at $10.16, still under the 52-week high of $12.83 per share. 

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