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Download the pdf version
Another vaccine has entered the race to cure the world of the coronavirus (COVID-19) pandemic, but unlike the US version, when AstraZeneca, in conjunction with a research team in Oxford, announced its successful preliminary trial results the company’s shares plummeted in trading on November 22.
When US pharma giant Pfizer announced its preliminary results on November 9 stock markets around the world (including in Russia) rallied and analysts immediately upgraded their 2021 outlooks with a “back-to-work” optimistic scenario that sees the pandemic ending in the second half of next year.
According to reports, the problem with AstraZeneca’s drug is that it was slammed in a investment bank analyst’s note that led to a big sell-off in the company’s shares.
By the afternoon following AstraZeneca’s report, Jeffrey Porges, analyst with the American investment bank SVB Leerink, which specialises in medical and pharmaceutical assets, slammed the vaccine, accusing AstraZeneca of having embellished its results, not disclosed any statistics for side-effects or severe cases, and not included the number of participants at risk and other minorities in accordance with FDA requirements, The Bell reports. “We believe this product will never be certified in the US,” Porges said.
Porges separately noted that adenovirus vaccines (that place the coronavirus DNA inside another virus) against COVID-19 (the Russian Sputnik V uses the same technology) will be in principle unreliable due to the immunity of a part of the population to adenoviruses. Porges concluded that the market for adenovirus vaccines will be smaller than that of the rival RNA-vaccines (which both the US vaccines use).
An AstraZeneca spokesman called the criticism “too harsh.” According to the company, it is in talks with the FDA to organise clinical trials on a separate sample in the United States.
The accusations of shoddy science made against AstraZeneca’s vaccine echo similar claims made against Sputnik V after it reported results from its Phase II trials. Some leading researchers wrote to the British medical journal The Lancet, claiming they had found problems with data submitted as part of the peer-reviewed paper Russia’s Gamaleya Institute had submitted that suggested the trial results had been fabricated. While it remains unclear what is going on here, the question marks raised over Sputnik V have contributed to it being widely ignored in the western media as a serious rival to the US vaccines. Indeed, when Pfizer’s drug was announced the market popped, but there was almost no market reaction at all to Sputnik V’s results published in The Lancet, one of the most respected medical journals in the world.
Beyond the market’s reaction, the whole race to find a cure to deal with what is a global public health emergency has been overtaken by geopolitical rivalries and prejudice. And that is not to mention the commercial interests, which are huge. The coronavirus market is thought to be worth up to $100bn and Russia has said that it hopes to capture a third of that. If that happens then Russia will earn more in a year from one drug than it currently earns from exporting arms or grain – and Russia is currently the biggest grain exporter in the world.
There is a lot of money on the table and commercial interests are already coming to the fore. A price war has already broken out. AstraZeneca’s vaccine appears to be by far the cheapest, selling for $3-$4 a dose. Russia’s Sputnik V export price is an estimated $8-$10 per dose, although presumably it will sell its vaccine on the domestic market at cost, although the fund has not said so explicitly.
As both these drugs are based on adenovirus vaccines technology they are more robust and can be kept at close to room temperature, whereas the US rivals are based on RNA-messenger technology and therefore have to be kept extremely cold or they break up, causing major logistical problems and greatly increasing the costs.
Development of the Russian drug was financed by the Russian Direct Investment Fund (RDIF), the sovereign wealth fund, and is a for-profit venture, but even its higher export price is still a lot less than the cost of the US RNA-vaccine rivals.
Pfizer, which filed for US approval of its formula on November 21, said earlier that a dose of its product will carry a $19.50 price tag. Moderna, thought to be close to signing a deal for a comprehensive rollout in the European Union, announced last week that it will charge between $25-$37. Both are RNA-vaccines and it is not clear if these estimates include the transport costs or not.
It is particularly unfair to rubbish AstraZeneca, as the company has said from the outset that it is a not-for-profit project and will sell its drug at cost in the interests of public health.
The US rivals are produced by commercial companies and intend to grab as large a slice of the up to $100bn vaccine market as possible. Russia lies somewhere in the middle. AstraZeneca last summer struck a deal on joint production with Russian businessman Alexey Repik's R-Pharm company to produce its vaccine in Russia. Its licensing deal allows for global distribution but bars distribution in Russia and the Commonwealth of Independent States (CIS) – Sputnik V’s core market. Over 50 countries have already signed pre-order deals for Sputnik V, including Hungary and Poland in the EU. Turkey is negotiating to make Sputnik V under licence.
We should be happy
Let's be clear about a few things here: first, we should welcome the fact that there are now four reportedly viable competing vaccines (five if you count the fact Russia has just about a second vaccine that has just started trials).
First of all, that gives everyone a choice between the rivals. Don't trust the Sputnik V? Fine. Take one of the others.
Secondly, we should celebrate the fact that this virus looks particular vulnerable to treatment. All of the leading candidates report extremely high efficacy rates. The US FDA demands an efficacy rate of at least 50% to register a vaccine for general release. The EU sets the bar higher at 75%. All the current corona-candidate have reported efficacies of at least 90%; even the Oxford vaccine reported an efficacy of over 90% when the second half of the trial group were given a smaller dose in the second jab. The reported final 70% efficacy rate result is an average of the efficacies of the two sets of trials.
Thirdly, being generous there are some question marks over the data from both AstraZeneca and Sputnik V, but against that both teams have conducted the full trial, with over 40,000 volunteers in Sputnik’s case – roughly the same number of participants as in the Pfizer trial. Moreover, all the trials are reporting the same approximately 90% efficacy rates; indeed, both technologies seem to work equally effectively. Excluding the possibility that the Russian researchers are flat out making up their results (which many will chose not to do), then the trials all show that the vaccines are similarly effective, even if they have been sloppy in their reporting in their haste to lay a claim to part of that $100bn market.
Fourthly, and most impressively, we should be amazed that in the space of ten months that we have any vaccine at all. Vaccines are extremely hard to produce. There are multiple hurdles to overcome, and the fact that all viruses mutate, as that is a basic part of their survival strategy. Normally it takes about 18 to 24 months to produce an effective vaccine. The annual autumnal flu vaccine doesn't have a 90% efficacy rate and five years on there are still no effective vaccines against H1N1 (bird flu), SARS (severe acute respiratory syndrome) or MERS (Middle East respiratory syndrome) – all of which belong to the coronavirus family.
There have been calls for governments to step in and buy up sufficient vaccine to inoculate the whole world as by far the cheapest solution to the economic damage caused by the pandemic. Several years ago the World Health Organisation (WHO) did a study that found by far the most productive investment a government can make into its economy is into healthcare.
The gains are not just from reducing the cost of treating sick people – although those are significant – but mostly from the fact that by far the more productive wealth creation asset a country has is its people. Good healthcare means people work harder for longer and so produce far more wealth than is spent on improving healthcare. And people that are still alive can work even harder than those that have died from coronavirus...
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