Deutsche Bank Returns With Updated Primer On Global Race For COVID-19 Vaccine

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by Tyler Durden
Wednesday, Nov 11, 2020 - 10:20 AM

With all the vaccine-and therapeutic-related developments already this week (the Pfizer-BioNTech announcement, Novovax's new deal with the federal government, with the Eli Lilly antibody treatment earning FDA emergency-use approval, news of Brazilian authorities halting a trial involving a leading Chinese vaccine candidate etc.) it's not surprising that a team of analysts at Deutsche Bank have just released a follow-up to a comprehensive summary about the global race for a COVID-19 vaccine that was apparently popular with both clients and readers of financial blogs.

In the preamble to the research, the analysts note that there are now 12 vaccine projects that have reached 'Phase 3', the most expansive and final stage of testing. Of those, 6  - 4 Chinese and 2 Russian - have already received some limited form of emergency approval (also: Vladimir Putin claimed that his adult daughter tried the Russian vaccine during the trial, and was fine).

As DB has noted in the past, some 80% of vaccines are typically approved after reaching Phase 3. But that's hardly a guarantee that the optimistic timelines for a vaccine (in the US and Europe, at least) offered by Pfizer, Dr. Fauci, the leaders of Operation Warp Speed and others will pan out.

Read the rest of the report below:

Vaccine Developments:

More than 170 vaccine candidates were in development in November 2020. These efforts are being tracked by the WHO. Twelve vaccines are currently in phase 3 trials, including six already approved for emergency use and three additional vaccines (by AstraZeneca, Pfizer, and Moderna) that could receive similar validation by the end 2020. Of all clinical drug trials that reach phase 3, about 60% gain approval for widespread use. This suggests that there is a very high chance of a vaccine approval soon.

Given the pressured timeline to end phase-3 testing, adequate results could begin to be released in the first quarter of 2021. The first successful candidate(s) could be fully approved in H1 2021. If AstraZeneca’s and BioNTech/Pfizer’s testing were halted and trials delayed, full approval could get pushed to H2 2021.

Vaccine candidates, such as those being developed by AstraZeneca, BioNTech/ Pfizer, J&J, and SinoVac, are being tested in various countries. They could be more readily accepted because their phase-3 trials are being conducted on populations with diverse ethnicities, nutrition intakes, immunity levels, and ages.


Once a vaccine is approved, the next important milestone will be production and distribution. The WHO does not expect widespread vaccination until the middle of next year, and even that looks optimistic.

In total, the world will need at least ten to fifteen billion doses. That’s because most Covid-19 vaccines will require people to receive two-doses by injection. It’s fairly obvious to state but that means this is going to be one of the biggest logistical challenges ever known to humans. By comparison, in 2018 ten billion 1 doses globally across all vaccines and inoculations were injected. Global distribution will face a bottleneck because there are only four-to-six facilities in the world that can reliably mass produce vaccines. Other issues include technology transfer, intellectual property protection, and temperature-controlled distribution (called “cold chain”).2

Our baseline scenario involves a gradual post-vaccine normalization of economic and social activity occurring in advanced economies over the second half of 2021 and into the first half of 2022. For other parts of the globe, normalization will likely emerge through 2022 and well into 2023. Vaccine production should pick up enough to advance this schedule but getting enough doses to adequately cover a billion people in advanced economies by mid-2021 and 6.5 billion people in emerging economies by end 2021 seems overly optimistic.

According to recent announcements about the vaccine candidates in Phase 3, seventy eight million doses could be ready by the end of next year. Assuming a stable annual production and increased production capacity later on, the world could be covered in 2022. Though it's worth highlighting that the vaccines are all for adult use.

Earlier we noted that, assuming a 75% vaccine efficiency rate and a full vaccination of the population (very unlikely), three-quarters of the world’s population could be vaccinated by mid-2023. That should be enough to curb the spread of infection, but not enough to eliminate the virus. However, now with Pfizer’s reported efficiency of over 90% based on early data from Phase 3 trials, it is on par with highly effective childhood vaccines for diseases such as measles. Assuming an R0 of 2.5, it would take just over 60% vaccination coverage to achieve herd immunity. That may be feasible over the course of 2021.

Because the best vaccines will inevitably be in short supply, many advanced economies have started signing bilateral supply agreements with manufacturers. The UK, US, Canada, Japan, EU, and Australia will have secured enough diversified doses from leading candidates for their populations.

If the Oxford/AstraZeneca vaccine is successfully rolled out, the benefits would be distributed symmetrically across regions because most governments around the world have secured significant quantities. Emerging economies will likely benefit more than G10 economies from a Chinese vaccine.

Distribution & Price:

According to Northeastern University’s Mobs Lab, which assessed a scenario in which doses were distributed globally based on each country’s population, a vaccine would have prevent 61% of total deaths. In a second scenario, in which 50 high-income countries monopolised the first two billion doses of the vaccine, nearly twice as many people would die and the virus would spread more widely.

To ensure a ”fair” distribution and to avoid ”vaccine nationalism,” 172 countries and multiple vaccine candidates are engaged in the Covid-19 Vaccine Global Access Facility (COVAX initiative) with the aim of having enough vaccine doses to treat at least 20% of the participating countries' populations, with a goal of two billion doses by the end of 2021.

“Fair distribution “also means three tier prices. Advanced economies would pay back a lot of the fixed costs, whereas middle-income countries would pay some of its costs, and the poorer countries would pay a true marginal cost.

Very few vaccine development companies have “officially” set their prices. We should expect a wide variation in pricing. Moderna indicated that its prices are likely to be around $37 per dose maximum. Media reported that AstraZeneca sold its dose at about $3 or $4 to the EU. The vaccines developed by J&J and Sanofi/GSK are expected to cost about $10 per dose. The mRNA-based vaccine (e.g. Moderna and BioNTech/Pfizer) are likely to be costlier as they are most expensive to manufacture. China’s Sinovac started selling its vaccine in some cities at $60 for two shots as part of an emergency use program. COVAX has an agreement with Serum Institute of India to deliver doses of candidate vaccines licensed from AstraZeneca and Novavax to low- and middle-income countries at a maximum of $3 a dose.

Efficacy, Herd Immunity, and Vaccination:

Vaccines currently in phase-3 trials are only meant for adults, including the elderly and early data from Pfizer/BioNTech has suggested an efficiency of over 90%. Next we should likely hear from Moderna and AstraZeneca over the coming weeks. Early stage vaccine trials currently in phase 3 have been largely effective in individuals between age eighteen and fifty-five. Additional early stage trials from both AstraZeneca and BioNTech/Pfizer have shown that their vaccine candidates are effective in elderly people as well.

Most vaccines currently in phase 3 will require two shots. An exception is the vaccine by Johnson and Johnson, which is expected to be a single-shot vaccine. Early research shows that any immunity is likely to be time-bound, which means that people might need injections at regular intervals as is the case with flu vaccines. A study from Imperial College London highlighted that the proportion of people in England with antibodies dropped by more than a quarter in the space of three months. The roles of mucosal immunity, biological antibody activities (e.g., antibody-dependent cellular cytotoxicity), and T cells in the protection offered by natural infection or passive immunisation are still unclear.

Tests on vaccinated primates showed reductions in pathology, symptoms, and viral load in the lower respiratory tract, but they failed to elicit sterilising immunity in the upper airways. Sterilising immunity in the upper airways has been claimed for one vaccine, but without peer-reviewed confirmation.

Assuming that development and production bottlenecks are cleared, population willingness to receive a vaccination remains a question. Our proprietary survey showed that between 35% and 53% of people in various countries will choose to be vaccinated—a much lower number than we found in August. This leads many to debate whether vaccination should be mandatory.

Due to limited vaccine supply, and because vaccines could be less-than-fully effective, and because many people won’t accept vaccination, herd immunity probably won’t be reached in advanced economies until the first half of 2022 and more globally in 2023. And if vaccine candidates’ trials were to be delayed, herd immunity would probably be reached in early H2 2022 for advanced economies and mid-2023 globally. Full normalization of economic activity could take even longer.

Historically, there has been resistance to vaccines. Many believe that diseases are disappearing due to better sanitation and hygiene, not because of vaccines. This has been proven false by the resurgence of previously eradicated infectious diseases. An example is measles, which was declared eradicated in the United States in 2002 and then reappeared in 2014 with six hundred cases). Some people think that the risks of vaccines outweigh the benefits. For example, many think that vaccines can cause autism even though the CDC has clarified that vaccine ingredients don’t cause autism. People often distrust science and the government, or they believe that pharmaceutical companies want to sell a product regardless of harmful consequences.

As a result of these false notions, more than a tenth of one-year-old children globally are not immunized against tuberculosis and hepatitis B. Less than half of one-year- old children globally are vaccinated against pneumococcal disease or the rotavirus. The WHO listed “vaccine hesitancy” as one of the top-ten threats to global health in 2019. According to our proprietary survey, a third of the people surveyed were vaccinated last year for the flu. In Europe, only half of the population agreed that “vaccines are safe.”

An extreme scenario to ensure full vaccination coverage would be make it mandatory. Of course, it is difficult to define mandatory. Public policy might involve incentives, punishments, or a combination of the two. Medical exemptions will be needed for various groups. Governments will need to acknowledge the impossibility of determining the long-term side effects of a newly developed Covid- 19 vaccine at this time.

In our proprietary survey, we asked people if they believed that governments should mandate Covid-19 vaccination. In October 2020, only a third of the Americans and French, and half of Italians and British, were in favor of mandatory vaccination. This could be explained by: (i) the politicization of vaccines during the US elections, and (ii) recent reports about adverse effects of a few candidate vaccines during phase 3 trials (e.g. AstraZeneca and J&J), which resulted in temporary pauses in the trials. (These trials have since resumed, or will resume after medical agency reviews.)

Meanwhile, without herd immunity, cheap and fast tests could be a solution:

We might need to learn to live with this virus. Many scientists believe a resurgence in SARS-CoV-2 could persist until 2025.8 During the coming winter months in the Northern Hemisphere, people could see the virus spread at an accelerated pace because they spend more time indoors where virus transmission is more prevalent.

On the positive side, a few countries have started to implement cheap, fast tests. These tests would allow people to return to work quickly and they could be a game- changer for the travel and hospitality industries. It may only be a question of time before these tests are offered at schools, universities, companies, airports, and pharmacies. As with masks, the rapid test could soon be universally available.

Most tests require specialised equipment to read results, limiting widespread use. Recent antigen tests (e.g. Abbott and Innova Medical Group) have shown promising results with an accuracy above 90%. Health care professionals are administering antigen tests. In addition, companies are developing self- administered kits that use saliva samples. None of these self-administered tests have received regulatory approval yet.

Only a few countries have started implementing cheap, fast tests. Italy began trials with coronavirus swab tests in hospitals in July and, later, at major airports to screen high-risk passengers. Plans are underway to screen all passengers at all airports. Spain, in April, began using these tests in elderly care homes and hospitals. The US will use 100 million tests from Abbott in schools and “other special needs populations.” Some US airlines have started to offer pre-flight rapid coronavirus testing. The UK is planning to roll out two tests ahead of winter to NHS hospitals, elderly care homes, and labs. Rapid antigen tests are being used as screening tools for sports, such as professional basketball and football. Results can take fifteen to thirty minutes.

These tests are expected to improve the situation in African countries, where the testing ability is limited to large cities and often take two to ten days to obtain results.

The WHO says that these new tests will be used in addition to PCR tests and will be more effective when used on patients who show symptoms, have a high viral load, or high concentrations of the virus in upper respiratory tracts. The WHO recommends that these tests be used in remote and rural areas. The organization has rolled out about 120 million rapid tests to low- and middle-income countries.

Conclusion: Vaccine Side Effects

Most vaccine side effects are well-identified. They are mainly caused by adjuvant, which is an ingredient used in some vaccines that helps create stronger immune responses. Adjuvant vaccines are known to cause more local reactions (redness, swelling, and pain, etc.) at the injection site, and more systemic reactions (fever, chills, and body aches) than non-adjuvant vaccines, according to the CDC. Most vaccines developed today are not adjuvant-based and include just small amounts of germ components, such as proteins, rather than the entire virus or bacteria. Among vaccine candidates that have reached phase-3 trials, the only adjuvant- based vaccine is Novavax, which uses a proprietary saponin-based MatrixMTM adjuvant. Recently, Bharat Biotech announced that its novel coronavirus vaccine will use adjuvant Alhydroxiquim-II to boost immune response and longer-lasting immunity.

Thimerosal, a form of mercury, is used in some vaccines in small quantities as a preservative, mostly for flu and a few multi-dose formulations. The CDC denies any causal relationship between Thimerosal and autism. The CDC states that the mild side effects include redness and swelling at the place where the shot was given.

Anaphylaxis is a severe allergic reaction to ingredients such as gelatin, which is sometimes in vaccines. It can cause life-threatening breathing and/or circulation problems. It is always extremely serious, but reactions can be treated with adrenaline. Influenza and yellow fever vaccines mostly contain egg protein; therefore, people with severe egg allergies are recommended to get the injection under medical supervision. Based on data from the UK between 1997 to 2003, the overall rate of anaphylaxis is around 1 in 900,000.

Common side effects, in early trials, from Covid-19 vaccine candidates have included tenderness and pain. Less-common systemic side effects have included headaches, fatigue, and myalgia (achiness). However, these are general side effects which one might experience after taking any vaccine.

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Source: Deutsche Bank