The TD Cowen Insight
The biothreat landscape has changed and is a growing priority in D.C. given geopolitical tensions. HHS, DOD, and myriad agencies are shifting priorities to address these new threats. Congress is assessing lab security and medical supply chain risks, and synthetic biology companies are advancing detection tools. More funds, better coordination, and measured rules will likely be critical to shore up preparedness.
COVID-19 Exposed Frailties and Shortcomings in our Governance Systems
The U.S. and the broader global response to COVID-19 exposed multiple frailties and shortcomings in governance systems, including in processes and capabilities for handling biothreats. These failings not only brought home the need to improve pandemic preparedness, they also prompted a fundamental change in the world view of biosecurity risks and how these threats are shifting and amplifying.
Recent Trends Have Increased Risk of Biothreats
Advances in biotechnology and synthetic biology, global climate change, increasing urbanization, and the fractured geopolitical landscape have widened the aperture of biothreats. Moreover, it has done the same for entities, both public and private, responsible for or equipped to help address them. A biological hazard, as we learned with COVID-19, spares no sector of the economy, and the state of preparedness to assess and act on biological threats has broad ramifications for investors. As attention in Washington focuses on efforts to shore up the U.S. biosecurity complex, this report provides investors with a detailed look at what is being done and what the road ahead might look like.
Focus on Biosecurity Could Potentially Unlock Public/Private Partnerships
HHS, DOD, the State Department, and myriad other agencies are rethinking past programs. They’re implementing new measures related to surveillance, laboratory security, the medical products supply chain, medical countermeasures, and safeguards for biotechnology and synthetic biology. Ultimately, we find that biosecurity is an increasing priority. This brings several early and emerging opportunities for public and private sector partnership that could provide upside for medical countermeasure and synthetic biology companies.
Deep Dive Into Biosecurity
We provide a deep dive into the reverberations for biosecurity, encompassing natural outbreaks as well as accidental and deliberate threats. We dig into shortcomings of the US medical supply chain and efforts at the DOD to overcome them.
This report is supported by interviews with 4 KOLs who are experts in biosecurity with experience working at DOD and HHS, as first responders. They also have experience working on high-risk biosecurity laboratory policies and trends. We’ve also analyzed the policy landscape, including the August 2023 Biodefense Posture Review, the 2022 National Biodefense Strategy, key agency priorities, historical budgets for biodefense, GAO reports, congressional findings, and pending legislation related to pandemic preparedness and biodefense.
What Industries Benefit From A New Focus On Biodefense
With biosecurity a key priority in DC, we expect that efforts to buttress the US biodefense will likely benefit synthetic biology companies that have tools to predict potential infectious disease outbreaks (e.g., via wastewater monitoring). They can also assist in identifying potential bad actors when it comes to inappropriate use of gene editing and other biotechnology advances. We do not anticipate any overly onerous regulations that could hinder the progress of synthetic biology companies and expect opportunities for these companies to partner with the government in addressing biosecurity concerns.
A New Platform Based Approach to Addressing Biothreats
A new approach to medical countermeasures is also in the works that would take more of platform-based approach to addressing potential future biothreats (naturally occurring or intentional). While it is still very early, this new approach could benefit companies with mRNA or DNA vaccine platforms as well as companies with VLP technologies. At the same time, we still see demand for existing biodefense products against pathogens like smallpox and anthrax from more traditional medical countermeasure companies.
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