Llamas vs. Bats: Llama antibodies, the coronavirus, and the biotechs that benefit

Could llamas be the key to containing the coronavirus? Scientists from several institutions have developed a treatment using antibodies found in llamas, called single-domain antibodies, to fight SARS-CoV-2 (Covid-19), a strain naturally found in bats.

Two biotech IPOs from 2017 are developing therapies using llama-derived single-domain antibodies. Ablynx (ABLX) yielded strong returns following its public debut in October 2017, capped by Sanofi’s $4 billion acquisition in June 2018 at a 200% premium to the IPO price. Ablynx is now working with Translate Bio to develop an mRNA vaccine for Covid-19. Argenx (ARGX), which IPO’d a few months before Ablynx, is also developing therapies using llama antibodies, and it has traded up over 10% in the last month for a 756% return from IPO. While not focused on llama antibodies, 2018 IPO Moderna (MRNA) has notched impressive gains since announcing its progress developing a Covid-19 vaccine based on its messenger RNA platform.

Biotechs developing innovative treatments and those targeting Covid-19 have performed especially well in the current environment, and the recent string of successful biotech IPOs indicates healthy investor appetite for more. 2020 biotech IPOs have averaged a 41% total return, and we expect a steady stream of biotechs to continue going public in May and June.

This article was originally published to IPO Pro on Friday, 5/1. For first access, sign up for a free trial of IPO Pro.