Could your facemask kill Coronavirus with electricity?
At the moment there isn’t any underlying evidence as to whether or not a face mask could kill the Covid-19 virus using electricity as indicated in the story on 5th June 2020 in Popular Mechanics (which we summarise below), it is based on a corporate claim. Whether or not the product mentioned will come to market is not necessarily relevant, however it is still interesting and speaks to the importance of greater R&D investment and the intensifying drive for JVs and M&A in the healthcare sector.
Two Japanese companies, Murata Manufacturing and Teijin Frontier, claim to have developed an antimicrobial textile called PIECLEX. The textile uses kinetic energy from a person’s movement to generate a low level of electricity on the fabric itself that can kill microorganisms upon contact and prevent them from reproducing. The corporate report claims that the fabric has been 99.9% effective for all the bacteria and viruses it has been tested for thus far.
Murata and Teijin are expecting to engineer the material to be used against Covid, however gaining access to samples of SARS-CoV-2 is difficult. As a result, testing on antimicrobial textiles is carried out using substitute organisms. It is therefore unclear how effective these textiles would be against SARS-CoV-2. In addition, biocides (low levels of chemicals that kill microbial organisms) also stimulate the evolutionary pathway to microbial resistance and therefore may not work as planned or for long when it comes to killing off the Covid virus.
R&D in healthcare has received a significant fresh boost from investors as the result of the Covid-crisis. Where one company may lack resources or ‘intelligence’ to develop a new drug or treatment, another company may thrive. This is one of the leading trends in M&A, the strategic filler. Given the potential financial bonanza for the Covid-19 winners, it is fair to assume that, in retail marketing parlance, the fear of missing out (fomo) is also driving M&A. Recently a potential merger was announced between Astrazeneca and Gilead, the goal was not solely about cost cutting, it was more about expansion of R&D capacity.
For small and mid-cap companies and their, often loyal, investors we see potential opportunity in a renewed M&A drive amongst big pharma – the availability of more R&D capital. An Ernst Young analysis of 100 small and mid-cap biotech companies observed that about 60% of them were trading well below their 12-month average price in 2019, suggesting a lot of buying opportunities are there to be unveiled and providing a strong indication that investors generally do not understand the stories and value generation potential or smaller biotech, device developers and nutraceuticals well enough, but that healthcare management teams can be persuaded of the merits, given the 50-200% premiums of recent deals.