Regulators, policymakers and others can more effectively battle the disease by creating incentives to make mpox a more attractive investment opportunity.
Can outbreak diseases compete for capital with noncommunicable diseases and other lucrative indications? The COVID-19 pandemic showed that they can. During the pandemic, numerous biotech startups and major pharmaceutical companies invested substantial resources in the development of vaccines, diagnostics and therapeutics. These investments not only saved millions of lives but also significantly increased revenues and valuations for several industry players. Think Moderna, Pfizer and BioNTech, to name a few.
Today, mpox poses a new global health threat. The lessons of COVID-19 point to the importance of engaging the biopharma industry in preventing and fighting outbreaks, and the means to doing so.
The number of mpox cases and associated deaths continue to increase. In 2022 and 2023, there were multiple mpox outbreaks worldwide, followed this year by the emergence of a new, more dangerous strain known as Clade Ib. Fortunately, a few tools are available to prevent and treat the disease. Jynneos, manufactured by Bavarian Nordic, and ACAM2000, developed by Emergent BioSolutions, are FDA-approved mpox vaccines, while TPOXX (tecovirimat), originally approved for smallpox, has been repurposed and used off-label as the primary treatment for mpox.
The Importance of Government Support
Despite the availability of these interventions, investment into mpox R&D and manufacturing capacity has largely been reactive, as evidenced by the recent outbreak caused by the Clade Ib strain: most resources were mobilized only after the strain started spreading outside of its endemic region. Clade Ib cases began in the Democratic Republic of Congo in late 2023, but the first vaccine doses have only just been delivered to the country.
In 2022 and 2023, contract-based awards drove the procurement of vaccines and therapeutics, including a $120 million U.S. government contract awarded to Bavarian Nordic for Jynneos manufacturing. In 2023, the Danish company reported nearly $1 billion in annual revenues, primarily driven by Jynneos sales. Additional deals have been struck over the last year, including a $157 million U.S. government contract for additional Jynneos doses as well as a $113 million order for TPOXX, manufactured by SIGA Technologies, suggesting meaningful revenue potential for companies in this sector.
In addition to the approved vaccines and therapeutics, there are other products in development, such as TNX-801, a live replicating attenuated vaccine developed by Tonix Pharmaceuticals and Bilthoven Biologicals, and BNT166, a multivalent mRNA vaccine from BioNTech supported by CEPI with a commitment of up to $145 million. Despite these ongoing programs, existing market incentives appear insufficient to galvanize significant investment from pharmaceutical companies. And current government procurement and short-term stockpiling offer an unpredictable revenue stream, which creates uncertainty for developers and manufacturers.
Multiple factors could play a pivotal role in strengthening incentives for mpox investment. Governments should increase funding for mpox research and development and commit to establishing multiyear stockpiles, supported by clear guidelines for procurement and supplier requirements. Additionally, policymakers could take steps to prioritize pre-emptive vaccinations for various at-risk populations. Close collaboration among public health experts, policymakers and regulators will be crucial to inform policy decisions, which could potentially lead to recommendations supporting vaccination for a broader subset of the population, mitigating the risk of future outbreaks while also catalyzing capital investment in a more stable and predictable market.
Don’t Overlook International Markets
Another valuable opportunity comes from markets outside of high-income countries. With the recent announcement of WHO prequalification of Jynneos, the first mpox vaccine receiving such approval, increasing procurement in developing countries is expected in the coming months. Until now, these regions have been relying on donations from the U.S. and Japan. Gavi, the leading public-private partnership dedicated to vaccine access, recently approved its 2024 Vaccine Investment Strategy, which includes establishing an mpox vaccine stockpile by 2026. WHO estimates that $135 million in programmatic funding will be required over the next six months to address the acute phase of the mpox outbreak, with funding needs expected to increase over time. While this opportunity may not be considered a “home-run” market, it is important to recognize its important public health value and potential for a modest commercial upside.
In addition to government funding and policies, regulatory incentives will have a substantial role in influencing capital allocation within the biotech industry. Adding mpox to the list of tropical diseases eligible for an FDA Priority Review Voucher (PRV) could enhance the financial return profile of these products. PRVs are transferrable and have fetched prices of more than $100 million over the past few years, with the most recent PRV selling for $158 million. Tonix Pharmaceuticals, which is developing the TNX-801 vaccine, has already proposed this inclusion, and it would behoove industry and FDA to collaborate on making it a reality.
With the resurgence of mpox on the heels of the COVID-19 pandemic, the pharmaceutical industry should be able to mobilize sufficient resources to mitigate both current and potential future outbreaks. However, additional efforts are required to address this global health threat. Public health authorities have struggled with inadequate resources, and the expansion of Clade Ib outside of Africa, with cases reported for the first time in Sweden and Thailand last month, underscores the need for enhanced strategies globally. In the coming months, it is crucial for regulators, policymakers and public health experts to focus on unlocking funding for mpox R&D, providing more clarity on procurement guidelines and budgets, promoting multiyear stockpiles to increase demand predictability and introducing regulatory incentives to make mpox a more attractive investment opportunity.
