Mpox is back! 🦠🦠😷

Welcome to Alternate Universe!

In today’s edition:

• Mpox is back 🦠🦠😷😷

• Job opportunities at recently funded European startups 👇

• Startup failure rates are on the rise 😱

The Crux 🔴

They say that lightning never strikes twice.

I say that’s BS.

In the summer of 2022, increasing cases of monkeypox (now called mpox) were detected.

The outbreak sparked fears of a second pandemic in a world barely recovered from COVID.

The panic had a positive impact on pockets of the markets.

Savvy investors could have capitalized on this situation by purchasing 2 stocks - Bavarian Nordic and Siga Technologies. Both companies were producers of vaccines against mpox and its “distant cousin”, smallpox.

The mpox outbreak perfectly combined my diagnostics background and my interest in the markets. Despite this, I was left kicking myself when I missed this opportunity.

Last week, the WHO declared mpox a public health emergency following the emergence of a new variant in Central Africa.

Let’s dive in.

🐰🕳️⌚

What is mpox? 🤔

Scientists and nomenclature – a match made in hell.

The ominous-sounding virus, formerly known as monkeypox, is back. In 2022, the WHO had decided to rename monkeypox as mpox, to avoid inciting racism.

Mpox is a viral disease caused by the mpox virus (MPX), forming part of the Poxviridae family, which also includes the eradicated smallpox virus. MPX was first isolated in humans, back in the late 50s in a Danish research lab.

The disease presents with typical flu-like symptoms - fever, chills, headache, and muscle weakness. This is followed by a painful rash with lesions that scab and heal over several weeks. Mpox is traditionally self-limiting and rarely fatal. The severity of the illness varies based on several factors, such as the patient's overall health and the extent of their exposure to the virus.

Mpox is a zoonotic disease, that spreads between animals and humans. It is thought to be harbored primarily in small mammals, yet the disease reservoir remains unknown. Human-human transmission requires close contact such as kissing, touching, and sex. Mpox can also spread through contaminated sheets, clothing, and needles.

What is different this time? ⚫

Mpox has two primary genetic groups (known as clades): Clade I (Central African/Congo Basin) and Clade II (West African).

Clade II was responsible for the global outbreak 2 years ago and is generally associated with milder symptoms and fewer outbreaks. Clade II outbreaks have a mortality rate below 1%. On the other hand, Clade I, has a fatality rate of one in ten infected individuals.

The current outbreak has been confirmed in the Democratic Republic of Congo (DRC) and the adjacent nations of Burundi, Kenya, Rwanda, and Uganda. The first cases have also been reported in Pakistan and Sweden.

The spread of MPX started in a poor and densely-populated mining region in the DRC. The poor health infrastructure coupled with the movement of sex workers traveling frequently to bordering countries, made this region, the perfect hotbed.

The current outbreak is driven by a newer version of Clade I, known as Clade Ib. This strain appears to be more transmissible and can also infect children. Genomic analysis reveals that Clade Ib has increased the genetic diversity of Clade I by an additional 54%.

More changes = more problems.

For starters, the increased diversity might make the virus more virulent - think delta and omicron strains of COVID-19.

Secondly, these genetic changes complicate the detection and management of mpox. The genome sequences from the DRC outbreak include a significant deletion that disrupts the effectiveness of previously developed diagnostic kits.

How do you detect and manage? 🔬💉

Mpox symptoms align with other infections like measles and chickenpox. Differential diagnosis requires effective diagnostic testing. The primary choice is real-time polymerase chain reaction (RT-PCR), since antibody testing can prove inconclusive.

While Mpox is generally self-limiting, vaccines are still recommended, especially in vulnerable groups like those with weakened immune systems, young children, and pregnant women.

Let’s take a look at the current vaccines available.

ACAM2000 was one of the earlier vaccines against smallpox. The vaccine is based on a live and unattenuated vaccine, meaning severe side effects such as encephalitis are possible, making it unsuitable for immunocompromised patients.

The Jynneos vaccine (marketed as Imamune and Imvanex) is based on a non-replicating strain. When compared to ACAM2000, Jynneos demonstrated a similar immune response but with fewer side effects, meaning it is better tolerated by Immunocompromised patients.

A third vaccine, LC16m8, was approved and used in Japan during the 2022 outbreak. The vaccine has fewer side effects than ACAM2000 but elicits a weaker immune response compared to the other 2 options.

Which are the trades? 📈

Bavarian Nordic (OMX: BAVA, OTC: BVNRY)

Market cap: 21.13B DKK (c. $3.14B)

The Danish company is the maker of the Jynneos vaccine; the only mpox vaccine which uses a non-replicating strain, thereby reducing side effects. The vaccine has been approved against smallpox and mpox in the US, Canada, UK, EU, and Switzerland.

Bavarian Nordic has submitted clinical data to the European Medicines Agency to extend the approval of its vaccine to include adolescents aged 12-17.

The submission is based on study results showing similar immune responses and safety profiles in adolescents as in adults. The vaccine, already approved for adults, was granted emergency use for adolescents by the FDA during the 2022 mpox outbreak. A decision on extending the EMA approval is expected by Q4 2024.

Bavarian Nordic trades on both the OMX in Denmark and OTC in the US, a fact that can influence the stock's price volatility and liquidity.

Emergent Biosolutions (NYSE: EBS)

Market cap: $640 M

Emergent Biosolutions has responded to the mpox public health emergency by ensuring the availability of its ACAM2000® vaccine, which is FDA-approved for smallpox and can be used for mpox under an emergency use authorization.

50,000 doses of its vaccine will be donated to Direct Relief for possible use in remote areas, guided by local and regional health authorities.

GeoVax (NASDAQ: GOVX)

Market cap: $37.64 M

One of the largest one-day price actions was in GOVX, which popped over 140% last Friday. On Tuesday, the price tumbled after the announcement that the company would raise $8.5m in a stock sale.

Not for the faint of heart.

The early-stage biotech company focuses on immunotherapies and vaccines against cancer and infectious diseases.

The key differentiator is the MVA platform, a vaccine vector based on Modified Vaccinia Ankara. This platform is designed to create vaccines that induce broad immunity by incorporating multiple antigens into a single vaccine. This approach uses MVA to generate virus-like particles (VLPs) in the body, which mimic natural infections, stimulating both antibody and T-cell responses. The platform offers enhanced safety and long-lasting immune responses while avoiding traditional manufacturing challenges.

GeoVax secured rights from the NIH for the use of NIH-MVA as a vaccine against Mpox and smallpox. The company is pursuing expedited regulatory approval to become the first U.S.-based supplier of this MVA vaccine. Its MVA platform can also be applied to COVID-19, for which the company is undergoing multiple clinical trials.

While Siga Technologies (NASDAQ: SIGA), did well in the previous outbreak, its momentum may have been slowed by the recent clinical trial results on its drug, tecovirimat.

Initial results on the antiviral drug showed it was no better than placebo against the specific clade I found in the current outbreak.

Several other microcaps such as APDN, TNXP, and VRAX, also popped over the last week.

It remains to be seen whether the recent aggressive price action in these mpox stocks will hold. I think this depends on a combination of:

• Number of cases and countries reporting;

• Efficacy of current vaccines against this strain;

• Efficacy of diagnostic testing to capture this strain;

• Anti-vax sentiment in a post-COVID world;

• The subsequent strength of news coverage

Then again, the market has a knack for defying rational expectations. 🤔

P.S. Liking this issue? Forward to a friend 🧑‍🤝‍🧑

Headhunted 🦅

Recently funded private companies need talent! Scout jobs at recently funded European startups, ahead of your competition. 💪

1. Clearly 🇬🇧 - Clearly secures $4.3m seed round to drive Net Zero targets in global transportation. Hiring a data engineer and senior product designer (link)

2. Eschatology Entertainment 🇨🇾 - The game dev studio announced the closing of a €10.2m investment round. Hiring a level designer and artist (link)

3. Promethean Particles 🇬🇧 - The company has closed an £8m Series A to expand production of carbon capture materials. Hiring engineers and an adsorption specialist (link)

4. Hexarad 🇬🇧 - The London-based company focused on radiology software has closed a €13m Series B. Now hiring a Head of People (link)

5. Powerdot 🇵🇹 - The Portuguese EV charge point operator has raised €165m in green financing. Multiple roles available (link)

Interestingness📔 

• Start-up failures rise 60% as founders face hangover from boom years (link)

• Ozempic's biggest side effect: Turning Denmark into a 'pharmastate'? (link)

• How Millionaire Bankers Actually Work | Authorized Account | Insider (link)

• Unfunded pension entitlements in major European countries between 300% and 500% of GDP (link)

📚 New to investing? Grab a PDF copy of my ebook here.

As always, the financial disclaimer!

This is not investment advice. I am not a financial advisor. Make sure to conduct your thorough research before purchasing or selling financial products.

PS. I own positions in Bavarian Nordic, GeoVax, and Emergent Biosolutions. Market cap figures may have changed since the time of writing.