01-10-2021 14:21

Vaccine development and production ramp up at the speed of light

When can we realistically expect a vaccine for COVID-19? Johan Trocmé, director at Nordea Thematics, interviews Michael Novod, director and healthcare sector coordinator at Nordea Equity Research.

In the latest issue of Nordea On Your Mind, "Coronavirus: Plan B", Johan Trocmé, director at Nordea Thematics, talks to Michael Novod, director and healthcare sector coordinator at Nordea Equity Research. He describes how COVID-19 vaccine development has unprecedented funding and incentives for success. Micheal Novod expects an effective vaccine to become available soon, although time for production ramp-up, distribution and actual vaccination will delay an effective defeat of COVID-19. The WHO expects it to take two years to declare the pandemic over, but consumer behaviour could start to normalise much earlier.

Where are we today in COVID-19 vaccine development?

Michael: There are currently hundreds of vaccines under development and five to ten of these are also entering, or are already in, advanced phase III testing with thousands of subjects. The vaccines that have come the furthest so far are the ones from Pfizer/BioNTech, Astra, Moderna and NovaVax, while those in second place are the ones from Sanofi/GSK and JnJ, among others. There are also Chinese-developed vaccines that are very advanced in clinical testing (ph III), as well as one Russian vaccine that has already been approved in Russia. However, with regards to the latter, no data is currently available and hence we do not know if it is effective or safe. Over the coming six to twelve months we will also see many more vaccines enter late-stage clinical trials and some of these may be even more effective than the first round of vaccines. The late-stage testing, which is required for potential approvals, includes studies where up to 30,000 individuals are enrolled in each clinical trial. In the JnJ phase III trial, some 60,000 individuals will be included.

Is an effective vaccine likely to become available, and if so, when?

Michael: Our view is that there will be an effective vaccine available and that it will likely be rather soon, ie within the next 3-6 months. With regards to regulatory hurdles, the FDA in the US has issued a guidance document that describes the regulatory requirements to approve a COVID-19 vaccine. Among many other things, the guidance discusses the importance of ensuring that the sizes of clinical trials are large enough to demonstrate the safety and effectiveness of a vaccine. It conveys that the FDA would expect that a COVID-19 vaccine would prevent disease or decrease its severity in at least 50% of people who are vaccinated. Furthermore, the FDA has already tentatively scheduled a so-called Advisory Meeting to take place on 22 October, where the first phase III data from one or two of the vaccines will likely be available. Recently, we have also seen speculation in media that the US administration is reflecting on whether to possibly give an emergency use authorisation (not full approval but vaccine can be used) to the Astra vaccine during October, should it prove safe and effective.

Could it give permanent immunity?

Michael: Based on all the data available thus far, permanent immunity is, in our view, not likely from the first wave of vaccines. It may give immunity for one to two years, but likely not longer. We believe this view is shared by many of the pharma executives from the pharma companies that are involved in the vaccine trials. Next generation vaccines could provide longer immunity. However, permanent immunity is not needed. An effective vaccine with just one to two years of protection would suffice to effectively stop the pandemic.

What are the challenges in production, distribution and allocation?

Michael: There are numerous challenges that need to be overcome but where companies, governments and relevant authorities are currently working at the speed of light. One thing is obviously to get each of the trials with 30,000 participants being conducted in a high quality and consistent manner. Next is the speed and quality of the regulatory review to ensure that vaccines are safe to use. Thereafter comes production and filling, where a large number of companies have allocated biologics production for this purpose. Such companies include Fujifilm Biosynth, Emergent Bio, Catalent, AGC Biologics, Astra, JnJ and Sanofi, as well as many others. Then comes the need for three to five billion glass vials to fill the vaccine. Large global glass vial producers have committed capacity for this as well. Lastly, the vaccines will have to be distributed and administered in clinics, hospitals and doctor's offices. The vaccines will require cold-chain distribution and some of the vaccines will also be two shots instead of just one. Hence, this will take many months from the start of production. But the good thing is that funding seems limitless currently, and the incentive to do this right is massive.

The next part is of course pricing and availability. Pricing for the Astra and JnJ vaccines will be largely free for the first round of pandemic protection. After that, i.e. when we come into potential seasonal vaccination, it looks like all vaccines will be priced around USD 20-25 per dose. This is also the case for some of the first round of vaccines from the likes of Pfizer/BioNTech, as they have funded development on their own without direct government support. With regards to global availability, foundations such as CEPI and GAVI have secured funding to make sure that the vaccine can be distributed also in the poorest countries.

When could you see a vaccine having brought the COVID-19 pandemic under control to a degree that we could enjoy freedom of action for consumers as per 2019 again?

Michael: As soon as an effective and safe vaccine is being distributed, it will likely take around six months to get it widely used and hence achieve broader herd immunity. It could also take longer, but that could be one scenario. Furthermore, when all this happens, then it will likely change behaviour and society will become more optimistic that there is a light at the end of the tunnel. With that said, these undertakings are massive, and the WHO said in late August that it would likely take up to two years, with a successful vaccine, to be able to declare the pandemic over. But of course, more normal consumer behaviour would be seen far earlier than that.

What should we expect within therapy to treat COVID-19 symptoms?

Michael: We are getting more and more tools in the toolbox. We have an antiviral drug from Gilead called Remdesivir, which is becoming standard of care together with the use of steroids. Also, recently the US FDA gave emergency use authorisation to convalescent plasma, ie the liquid part of the blood that is isolated from patients that have recovered from COVID-19. Then it is purified and can be given to patients that have been infected with the disease. The convalescent plasma contains a high level of antibodies against COVID-19 and hence helps the body to fight the infection. Later during 2020, we will also see the first results from trials with monoclonal antibodies to treat the disease with the most promising one coming from the US biotech company Regeneron. All these treatments are becoming available in significant volumes.

Is there a possibility that we could see a scenario similar to HIV, with no vaccine, but the availability of effective treatments almost eliminating the need for one?

Michael: This virus is not like HIV at all since HIV mutates a lot when it enters the body. This does not seem to be the case with COVID-19. Hence the likelihood of an effective vaccine is quite high.

What general scenarios for humankind’s dealing or coping with COVID-19 do you see today? Vaccine, effective therapy or having to live with it permanently?

Michael: There will very likely be a vaccine and also a range of effective therapeutics. Hence the ability to cope with this disease will be very strong, in our view. But as already noted, it will still take time and significant undertakings. The most likely scenario is that one or several of the vaccines in development will work, and that next generation/next wave vaccines could be even more effective.

Nordea On Your Mind is the flagship publication of Nordea Investment Banking’s Thematics team, which produces research for large corporate and institutional clients. The research does not contain investment advice and typically covers topics of a strategic and long-term nature, which can affect corporate financial performance.

Top decision makers at Nordea’s large clients across the Nordic region receive Nordea On Your Mind around eight times per year. The publication’s themes vary widely, and many are selected from suggestions by clients. Examples of covered topics include artificial intelligence, wage inflation, M&A, e-commerce, income inequality, ESG, cybersecurity and corporate leverage.


Michael Novod

Director and sector coordinator for the healthcare sector at Nordea Equity Research


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