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COVID-19: Vaccine companies seek buying commitments from govt, global agencies to de-risk investment

Drug makers say it would help them plan better to create capacities. Three potential vaccines candidates from India -- Covishield of Serum Institute with license from AstraZeneca, Covaxin of Bharat Biotech, and ZyCov-D of Zydus Cadila -- have progressed into human trials phase.

September 30, 2020 / 07:42 PM IST

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Vaccine makers, which have jumped into COVID-19 vaccine development and manufacture at their own risk, are now seeking advance buying commitment from government and international agencies as their potential vaccines enter Phase III clinical trials.

Among Indian vaccine makers, Serum Institute of India has managed to a get funding of around $300 million from the Bill and Melinda Gates Foundation to manufacture 200 million doses of AstraZeneca’s and Novavax’s potential COVID-19 vaccines for low- and middle-income countries.

Three COVID-19 vaccine candidates from India -- Covishield of Serum Institute of India with license from AstraZeneca, Covaxin of Bharat Biotech, and ZyCov-D of Zydus Cadila -- have progressed into the human trials phase.

While Covishield has begun phase II/III testing, Covaxin and ZyCov-D are in Phase-II trials and are expected to start Phase-III trials in October.


COVID-19 Vaccine

Frequently Asked Questions

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How does a vaccine work?

A vaccine works by mimicking a natural infection. A vaccine not only induces immune response to protect people from any future COVID-19 infection, but also helps quickly build herd immunity to put an end to the pandemic. Herd immunity occurs when a sufficient percentage of a population becomes immune to a disease, making the spread of disease from person to person unlikely. The good news is that SARS-CoV-2 virus has been fairly stable, which increases the viability of a vaccine.

How many types of vaccines are there?

There are broadly four types of vaccine — one, a vaccine based on the whole virus (this could be either inactivated, or an attenuated [weakened] virus vaccine); two, a non-replicating viral vector vaccine that uses a benign virus as vector that carries the antigen of SARS-CoV; three, nucleic-acid vaccines that have genetic material like DNA and RNA of antigens like spike protein given to a person, helping human cells decode genetic material and produce the vaccine; and four, protein subunit vaccine wherein the recombinant proteins of SARS-COV-2 along with an adjuvant (booster) is given as a vaccine.

What does it take to develop a vaccine of this kind?

Vaccine development is a long, complex process. Unlike drugs that are given to people with a diseased, vaccines are given to healthy people and also vulnerable sections such as children, pregnant women and the elderly. So rigorous tests are compulsory. History says that the fastest time it took to develop a vaccine is five years, but it usually takes double or sometimes triple that time.

View more

BE may secure funds from Gates Foundation

Though not officially confirmed, there are reports about Biological E (BE) close to securing funding from the Gates Foundation.

“You wouldn’t make a 100 million doses of something and wait for licensure, that’s the huge risk that manufacturers are taking on,” said Mahima Datla, Managing Director & CEO, Vaccines & Branded Formulations, BE, at a recent event.

BE has signed a licensing agreement with Baylor College of Medicine in the US to develop a recombinant protein-based COVID-19 vaccine. BE also signed a contract manufacturing deal with Johnson & Johnson to produce the latter’s COVID-19 vaccine candidate.

Follow our COVID-19 Vaccine Tracker here.

“For a large part, we are trying to do this pretty much with our internal resources,” said Sai Prasad, President, Quality Operations, Bharat Biotech.

Prasad said building a new facility is going to take at least 2-3 years. “Many of us have existing facilities. We are able to divert some of these capacities, and that’s how we are able to do what we are able to do,” Prasad said.

Govt plan on vaccine procurement

An executive of another company, which is also developing a COVID-19 vaccine, said that the government would be having a plan on how to procure and distribute vaccines. They may possibly wait for some more time to get clarity on which vaccines are safe and effective. The executive didn’t want to be named.

Vaccine manufacturers say any advance buying commitment from government or international agencies would help them to plan better to create capacities.

How much does it cost?

“At the completion of Phase I/II trials, companies will get a clarity on the kind of investments they need to make on manufacturing capacities,” the executive said.

“He expects at least Rs 100 crore, if not more, to create a dedicated manufacturing facility, and about Rs 50 crore for clinical trials in India. The cost of manufacturing vary on the technology adopted and capacity,” he added.

Except for the initial grants they have received to fund early research from BIRAC (Biotechnology Industry Research Assistance Council, Department of Biotechnology, under Ministry of Science and Technology, there was no other funding from the government.

The government is yet to announce any plan for buying vaccines from companies that are manufacturing them. This is in contrast to leading US vaccine makers which received billions of dollars in the form of push funding or upfront reimbursement for research, development and production expenditures, or pull funding, which constitutes payment for successful products.

The US government has allotted almost $10 billion flexible funding to back promising COVID-19 vaccine candidates that have advanced in clinical trials.

“The financial resources in India are very limited, and we are going through an economic slowdown. Why will a government risk on committing to buying something that’s not yet proved to be safe and effective?” said the executive.

He says that companies have taken calculated risks, and, if they succeed, they will make big money. Vaccines at the pre-clinical trial stage have roughly a 7 percent chance of succeeding, while the ones that make it to clinical trials have about a 20 percent chance.
Viswanath Pilla is a business journalist with 14 years of reporting experience. Based in Mumbai, Pilla covers pharma, healthcare and infrastructure sectors for Moneycontrol.
first published: Sep 30, 2020 04:55 pm
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