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Biggest risk for pharma companies starts from this point
Even as the world is grappling with the second coming of COVID across India and large swathes of Europe and the US, the real story is about the vaccine. The race is getting tighter with 3 large players getting into the final stages with relatively high success ratios. Where does the vaccine race stand and what will be the major risks from here on?
Written By Shashank Gupta
Table of Content
It is almost down to 3 players
To be fair, the Russian Sputnik and the vaccine candidates from two Chinese companies are making good progress. But Western regulators have objected to the transparency and stringency in the approval process. We, therefore, restrict the actual race to the 3 players that have submitted to stringent oversight. From that perspective; the combinations of Pfizer + BionTech and AstraZeneca + Oxford Research as well as Moderna are frontrunners. All the three players have exhibited more than 93% success ratio. In all the three cases above, the first 2 Phases of pre-clinical and clinical trials have been successful. They are in Phase-3, which is the stage where the sample size is progressively increased to submit the formula to a stress test. It is only after this stage that the test results will be submitted to the EC and USFDA for final approval. All the three players have also substantially tied up with the manufacturers for volumes. The success of the vaccine will depend on how quickly it is administered to the millions.
But the real risk begins now
For the pharmaceutical industry, this is likely to become the biggest source of risk. While large pharma MNCs in the US and Europe have been exposed to such R&D risks in the past, for many Indian manufacturers this is a major business risk. The wager at this point is that the demand for the vaccine will be large enough to support all the capacity that is being put up. That may not be the case. The demand may be lower, the actual immunity levels could improve and not all the vaccine candidates may get final approval. Some candidates may even face challenges post launch. Indian companies like Serum, Reddy Labs, Cipla and Wockhardt are investing in capacity in a big way to support this initiative. Serum has admitted that if it does not work out as planned, it could result in huge losses. That could be the real test for Indian pharma.
Logistics could be the key
Another key challenge in the vaccine race would be logistics. For example, Pfizer vaccine requires storage at -74 degrees Celsius; something not available on a mass commercial success. How these vaccines are transported, with the maximum efficiency at optimum costs and with minimum wastage; will be the biggest logistic challenge in the vaccine story. For the pharma sector, the real COVID vaccine risk might have just about started at this point of time!