Shares of producers of plasma derivative products are in focus on Monday after the FDA issued an emergency use authorization for investigational convalescent plasma for the treatment of COVID-19 in hospitalized patients.
FDA'S EUA ON PLASMA: On Sunday, the U.S. Food and Drug Administration issued an emergency use authorization for convalescent plasma to treat COVID-19, saying the "known and potential benefits of the product outweigh the known and potential risks of the product." In a statement, the FDA said more than 70,000 patients had been treated with convalescent plasma, which is made using the blood of people who have recovered from coronavirus infections. "Based on scientific evidence available, the FDA concluded, as outlined in its decision memorandum, this product may be effective in treating COVID-19," the agency said. The EUA authorizes the distribution of COVID-19 convalescent plasma in the U.S. and its administration by health care providers to treat suspected or laboratory-confirmed COVID-19 in hospitalized patients with COVID-19.
The FDA determined that it is reasonable to believe that COVID-19 convalescent plasma may be effective in lessening the severity or shortening the length of COVID-19 illness in some hospitalized patients. The agency also determined that the known and potential benefits of the product, when used to treat COVID-19, outweigh the known and potential risks of the product and that that there are no adequate, approved, and available alternative treatments.
"Today I am pleased to make a truly historic announcement in our battle against the China virus that will save countless lives," President Trump said at a White House briefing, referring to the coronavirus that causes COVID-19. "Today's action will dramatically increase access to this treatment."
WHAT'S NOTABLE: President Trump has been pressuring the agency to move faster to address the pandemic. At Sunday's briefing, he described the treatment as "a powerful therapy" made possible "by marshaling the full power of the federal government." On Saturday, Trump said via Twitter: "The deep state, or whoever, over at the FDA is making it very difficult for drug companies to get people in order to test the vaccines and therapeutics. Obviously, they are hoping to delay the answer until after November 3rd. Must focus on speed, and saving lives!"
POSITIVE NEWS FOR PLASMA DERIVATIVE PRODUCERS: The FDA EUA news is positive for Grifols (GRFS) which, together with CSL (CSLLY) and Takeda (TAK), is one of the main producers of plasma derivatives in the U.S., Equita analyst Gianmarco Bonacina told investors in a research note, according to Bloomberg.
Additionally, XBiotech (XBIT) announced Monday that the announcement opens the door for the company's antibody screening technology used to identify convalescent plasma. Under a collaboration agreement, BioBridge Global will be using XBiotech's COVID-19 antibody test to identify the convalescent blood products.
Other potential beneficiaries of the FDA EUA include Kamada (KMDA) and ADMA Biologics (ADMA) given their efforts in plasma-derived therapeutics and plasma collection in COVID-19.
PRICE ACTION: In morning trading, shares of Grifols gained 4% to $17.36, shares of XBiotech rose 7.5% to $19.73, while Kamada increased 19% to $11.94 and ADMA Biologics spiked 21% to $3.05.
