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With fears that a second wave of coronavirus is always circulating in parts of the world, and could sweep the UK within two weeks, the heat is increasingly on the pharmaceuticals sector to find a vaccine against the deadly disease. The good news, for the world’s population, is that there is no shortage of companies racing to find that vaccine.
Today came news that the UK government has signed its fourth coronavirus vaccine deal, securing up to 60 million doses of an experimental vaccine being developed by drug giants GlaxoSmithKline and Sanofi.
The government has already signed up for 100 million doses of the Oxford University vaccine being developed by AstraZeneca. It has also secured another 90 million doses of two other promising vaccines.
So far, results from AstraZeneca and US pharma giant Pfizer have proved hopeful. Both initial trials showed they provoked a joint immune system response in participants who have been give the vaccine in first phase clinical tests.
This latest vaccine, developed by Sanofi in partnership with GSK, is based on the recombinant protein-based technology used by Sanofi to produce a flu vaccine, as well as GSK's established pandemic technology.
Sanofi, which is leading the clinical development, said regulatory approval could be achieved by the first half of 2021 if trials prove to be successful. While we wait and see, manufacturing is already being scaled up to produce up to one billion doses a year.
As the entire world watches these trials and results with growing anticipation, it may make headlines and raise hopes that we will one day be able to resume ‘normality’, but in the background is always a reminder that these trials are the bread and butter of the pharmaceuticals industry. And they do not always lead to success. As investors in the sector know all too well.
Companies spend fortunes, not to mention decades, developing and testing drugs, treatments and vaccines that never make it to the public arena. And that is a sobering thought right now, with everything seemingly hanging on the ability to find a viable vaccine against Covid 19.
Rough estimates of how much it costs to take a drug candidate through clinical trials and regulatory approval comes in at just under $2.6 billion, according to the Tufts Center for the Study of Drug Development’s regular assessment of drug development costs.
Failure costs, as AstraZeneca knows. Just in January of this year, current UK vaccine frontrunner, which is due to post half-year results tomorrow, made a $100 million write-down after trials of a heart disease drug showed it to be ineffective in treating a particular cardiovascular condition.
All trials of the drug were discontinued and AstraZeneca said it would carry out a review into its $533 million value on the company’s balance sheet.
However, it is also true to say that in many ways, the research and development teams at these pharmaceutical companies are ultimately also where the money is made. Developing new and better medications is how they make money and R&D is an area in which AstraZeneca has really stepped up over the past few years. So much so that it has turned itself around from an ongoing battle with lapsing drug patents in the past seven years and again reaffirmed itself as one of the two main flag-carriers for the UK’s feted excellence in life science - the other being GlaxoSmithKline.
Its new medicines and treatments, especially in the field of oncology, is where its money is now being made.
In recent weeks it has become the UK’s most valuable company by market capitalisation, at £113.8 billion against Glaxo’s £81.5 billion.
If it can make a success of the Covid vaccine, then the decision to choose it over Glaxo, the world’s biggest vaccine manufacturer by sales, as its partner to develop and manufacture the potentially ground-breaking vaccine, could very well cement AstraZeneca’s position, at the helm of the pharmaceuticals industry, well into the 2020s.
Before then it’s back to the task at hand and the race to develop a successful vaccine to immunise every person on the planet against Covid and stop the pandemic.
More on AstraZeneca
More on GlaxoSmithKline
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