Big Pharma’s Big Failure: Two Years Into COVID-19

Summary

• Underdogs like Moderna, BioNTech and the University of Oxford beat big pharma companies like Merck, GSK and Sanofi to create Covid-19 vaccines.
• The key was big pharma thinking vaccine development was high effort, low reward. They focused instead on existing franchises, such as cancer medication.
• With less to lose, newcomers took exceptional funding from governments and venture capital to revolutionise the vaccine development process.

Macro Implications

• With new processes and regulations for vaccine development, we are better equipped to deal with future pandemics.
• Proven profitability and new money in vaccine development imply breakthroughs for existing viruses like RSV, CMV, and Aids.

Why Big Pharma Failed to Produce the First Covid-19 Vaccines

Today is two years exactly since the World Health Organization declared Covid-19 a pandemic. It took under a year from the outbreak in early 2020 for the first vaccine to secure regulatory approval. The fastest we had developed a vaccine beforehand was four years. But who was behind the achievement?

Many would have expected a big pharmaceutical company such as Merck, GSK or Sanofi with their gargantuan resources to cross the finish line first. Yet the prize went to German biotech firm BioNTech, a small husband-and-wife venture valued at under $3.4 billion when it debuted on the Nasdaq. It had never even brought a product to market. Now, the company is worth $36.35bn.

To discover the reason for this underdog upheaval, we spoke to Wall Street Journal Special Writer Greg Zuckerman. According to Zuckerman, it was partly about perception. Big pharma businesses saw vaccines as high effort, low reward:

‘If you think about the earlier coronaviruses, MARS, SARS, you think about Zika, you think about others, for a while they were lethal, they were troubling, they were scary. But then they go away, they dissipate, they peter out. And you spent all this time, this money, chasing a vaccine when sometimes it’s not even necessary by the time [you succeed], if you succeed. And then even if you do succeed, how often can you give a vaccine? Once a lifetime sometimes, sometimes every few years.’

Even for companies like Merck – vaccine giants – the thought of disrupting their cancer franchise seemed too high risk. What if Covid-19 did not become a global pandemic?

Yet smaller companies like Moderna and BioNTech, and even groups of academics like the University of Oxford, had less to lose. They lacked existing product lines to distract them, and they could focus on innovation.

How Scientists Developed a Vaccine So Quickly

As always, scientists stood on the shoulders of those who came before them. The years of research into a vaccine for HIV brought critical knowledge of the immune system, how to conduct trials, and even what failed: chasing the spike protein.

But the second key was social and political urgency. That manifested as unprecedented funding (from the public purse and venture capital) and a willingness for regulators to move faster than normal. The mobilisation of such massive resources – one report reckons €93bn of public money has gone towards Covid-19 vaccines and therapeutics – enabled new processes.

Specifically, as Zuckerman explains, the billions invested meant companies could run the risk of simultaneous testing:

‘Moderna built their vaccine, as did others, before they were sure it was even going to work. And again, the only reason they could do that is the government and others were handing out cheques. So, that should be reassuring for people. It was done in 330 days from the sequencing to the authorisation, which is just ridiculous. Historically, the fastest ever was mumps at four years, the average vaccine, 10 years, so 330 days is just a joke. But the reason why people shouldn’t be concerned is that they didn’t cut corners, they just did things simultaneously for the first time ever.’

Meanwhile, regulatory authorisation was faster than ever. The US Food and Drug Administration and the European Medicines Agency took under a year to approve the first vaccine. Compare that with HIV: scientists have been able to complete only six efficacy trials of potential vaccines after three decades of research.

What Our Response to Covid-19 Implies for the Future

Our experiences developing Covid-19 vaccines will transform future vaccinology. Core to the vaccine for Covid-19 was the novel technique of messenger RNA (mNRA). It had never gained approval for public use, and scientists can synthesise it in just days.

Moreover, the technique is highly adaptable to other viruses. The director of the Vaccine Centre at the London School of Hygiene & Tropical Medicine, Beate Kampmann, argues that mNRA ‘lends itself to the nimble plug-and-play approach that will be required to respond to [future] pandemics.’

As Zuckerman also says, the vaccine industry is now experiencing a financial windfall. And that is promising:

‘When there’s been success and there’s been money made, then talent and other resources suddenly flock to that area. So, the best and brightest are now backing mRNA approaches to different things, and they’re throwing themselves into new efforts… The Moderna folks are focusing on things like RSV, which is a virus that kills children and it kills the elderly – CMV, another virus. Others are taking on Aids, and Adrian Hill, malaria.’

We now also have a regulatory and manufacturing blueprint for developing and distributing vaccines on a global scale. And that can only be beneficial were another pandemic to emerge.

Yet this rosy outlook has risks. Covid-19 was arguably unique for mutating so slowly. That let scientists get on top of it. And it struggles to attack the human immune system – unlike herpes, for example, which actively blocks antibodies from binding.

Another novelty of Covid-19 was the massive public attention it garnered. Only the potential for sudden economic devastation – specifically to wealthy countries – and the loss of millions of lives was enough to activate such huge resources. Without that impetus, research and development in vaccine-oriented biotechs may dwindle.

To discover more about how Covid-19 vaccines were developed and why big pharma lost out, check out Greg Zuckerman’s book, A Shot to Save the World.