Podcast Transcript: Greg Zuckerman on the Inside Story of the Race for a COVID-19 Vaccine

This is an edited transcript of our 100th podcast episode with Greg Zuckerman published on 18 February. He is a Special Writer at The Wall Street Journal, and the author of A Shot to Save the World: The Inside Story of the Life-or-Death Race for a COVID-19 Vaccine. The book has been optioned by HBO for a series from Academy Award winning director Adam McKay. In the podcast we discuss, why it was outsiders and not Big Pharma that developed the vaccine, how the vaccine was developed so quickly, what made Jim Simons the top investor of all-time, and much more. While we have tried to make the transcript as accurate as possible, if you do notice any errors, let me know by email.

Introduction

Bilal Hafeez (00:01): 

Welcome to Macro Hive Conversations with Bilal Hafeez. Macro Hive brings you actionable investment insights for all markets, from crypto, to equities, to bonds. For our latest views, visit macrohive.com. 

We have a special occasion to celebrate. This is our 100th episode of Macro Hive Conversations. We launched our first episode just as COVID was breaking out in March 2020, and almost two years later, we’re at episode 100. Unfortunately, COVID is still with us but hopefully, it won’t be by the time we get to episode 200. And I wanted to thank the hundreds of thousands of people that have listened to the podcast and helped spread the word. It’s very gratifying to me that the hard work of producing a high quality weekly Macro podcast show has paid off. 

As a show of thanks, we have a gift for all of our listeners. We’re offering a special discount of $1 or one pound for eight weeks for full membership to Macro Hive. You just need to go to macrohive.com/100podcast. With membership, you get access to transcripts, to all of the podcasts, as well as our exclusive investor research on equities, crypto, and macro, you’ll also get access to our member Slack room where you can interact with the Macro Hive research team and other members all hours of the day. Once again, you can get a special discount of $1 or one pound for eight weeks at macrohive.com/100podcast. 

Now, onto this episode’s guest, Greg Zuckerman. Greg is a special writer at the Wall Street Journal, he’s the author of A Shot to Save the World: The Inside Story of the Life-or-Death Race for a COVID-19 Vaccines. The book has been auctioned by HBO for a series from academy award-winning director, Adam McKay. Greg is also author of the bestseller, The Man Who Solved the Market: How Jim Simon Launched a Quant Revolution. Now, onto my interview. 

So, greetings, Greg, it’s great to have you on the podcast. We’ve been in conversation for a while now and it’s great to have an excuse to finally have you as a podcast guest. 

Greg Zuckerman (01:56): 

It’s a pleasure. I’m a fan. You have one of the more thoughtful and eclectic podcasts out there, so I’ve listened for a while so it’s a pleasure to actually be a guest. 

Bilal Hafeez (02:07): 

That’s great. And this comes as you’ve just published this excellent new book called A Shot to Save the World, which is about the COVID vaccine, the race to create it, the personalities behind, all which we’ll talk about in our conversation. We’ll also talk about your book before that, The Man Who Solved the Market, about Jim Simons and his performance and track record that you delved into. But before we go into all of that, it’d be great to get your origin story. Where did you go to university? Was it inevitable going to journalism and finance as a focus within that? What’s your story? 

Greg Zuckerman (02:36): 

Sure. I never dreamed, frankly, of being a journalist growing up. I grew up in Providence, Rhode islands, the son of an academic, and my mother sold life insurance. Early on, I was enthralled by the markets, and my parents didn’t know much about it but it just intrigued me. As a kid in camp, I was trading stocks, I lost all the money, the little money I got from my bar mitzvah, playing the market. 

I was very impressed by a book I read about low PE stocks by a guy named Ray Dirks, who had some notoriety at one point. And so I bought low PE stocks, it took me a little while to realise sometimes there’s a reason why stocks are trading at low PE ratios, but I was literally having my counsellors and camp bringing me back. I remember Barron’s magazine on their days off, and I was cutting out between periods to call a broker to make trades as a kid. I remember just being amazed, even younger, at the back of a Skippy peanut butter jar when I realised it wasn’t a Skippy Corporation, it was like Proctor & Gamble, somebody, they also owned maybe some jelly. I’m like, “Wait, hold on a second there, brands, and there are companies, and they make money.” I just found the whole thing fascinating so I always figured I’d go work on Wall Street. 

I went to Brandeis University, a liberal arts school outside Boston. I did well. I majored in political science and took some economics. My father had taught political science, so that was a little bit in the blood. And I figured I did well in school, I’d go work on Wall Street after I graduated, and I graduated and I took some time travelling in Europe, got to New York, I guess it was 1990 or so, 1989, and I could not get a job. I didn’t get an interview. So, part of the problem was I hadn’t done any internships and worked on the side. I always worked in camps. I liked playing ball and being with kids and I figured, “Hey, I did well in school, I’ll get a job on Wall Street.” And no, I knew no one, I didn’t have any experience. It was a bad time. There were the reverberations of 1987 and there wasn’t much hiring going on at the time. So I couldn’t get a job. And the closest I could get was working on conferences, banking conferences. 

So, I did that for a little bit and I got fired twice from those jobs. I wasn’t very good at it, my heart wasn’t into it. I was writing on the side and doing things in the middle of the day. And I remember being fired and this woman, a veteran, walked me down the stairs and it was one of those little stereotypic cliched scenes where I had a box of all my stuff, and I was feeling down and out. I didn’t love my job but no one likes to be fired as a young person or any time. And she said, “Greg, you’re going to look at this as the best day of your life someday. Look, you’re going to look back on it.” And she was so right, because had I been pretty good at that job instead of awful, I would’ve stayed and got married and mortgage and all that stuff, but instead, I got fired and it forced me to figure out what I wanted to do. 

And I spent a few years with some entrepreneurial opportunities, I started a business, I took kids on college tours around America, and I started a newsletter or two, but then one day I saw an ad in the newspaper. Back then, there were jobs available for people in newspapers, and it was to be a reporter, to be a financial reporter. And I went in there and they gave me a “leaked” document. It was like a merger between Citibank and somebody else, and you were supposed to write about the document and interview a source, and the source is the editor. And I had no clips. I never thought about journalism, being a newspaper reporter, and I remember sitting there taking this test saying, “Wait, they’re going to pay me to write about Wall Street?” I loved wall street, I loved newspapers, I loved them, and I’m like, “This is what I should be doing. This is it.” So, I stumbled into this career. 

Bilal Hafeez (06:14): 

And then you’ve ended up at the Wall Street Journal, probably one of the top financial newspapers. 

Greg Zuckerman (06:18): 

Yeah. So, I started this little newsletter and broke some stories and it just came, “Frankly, this is what I should be doing.” There are a million jobs out there I’d be awful at, but this is what I’m natural at. I love talking to people about business, and finance, and it’s genuine interest on my part. So, a lot of people, I think, in my world, frankly, go into financial journalism because there’s a job opportunity, they want to be reporters, they’re really smart, good writers, but they’re not into business, they’re not into finance and in trading and investing, and I love this stuff. So, I think that gives me an advantage. 

And I worked on my writing. My writing wasn’t very good early on, and I was writing like an academic, and I was doing a pyramid, which means you do a little… Rule of academia, you’re in school, you have a nice little thesis at the beginning of my pieces, and then you should see my conclusions at the end, they were amazing. But my editor’s like, “No, Greg, in journalism, we do the reverse pyramid. No one’s reading until the end of the stories, or not everyone, so you got to hit them hard up high.” So, I had to learn that whole thing. And I just started reading Barbarians at the Gate, Liar’s Poker, Den of Thieves, all the classics, and I just threw myself into learning journalism. 

And yeah, I broke some stories at this little newsletter, I went to the New York Post for a little while, and that was a blast, and then I got to the Wall Street Journal. I got an opportunity to write about the bond market, and frankly, I turned it down. I was like I didn’t know much about the bond market, I wasn’t interested in bonds, I was more of an equities guy, and I got back to my office at the New York Post and they said, “Greg, the Journal may never call again. Take the bond job.” So, that was my first job. I started covering the bond market, I went to the Heard on the Street column, did that for a number of years, wrote about hedge funds, private equity, now I’m an investigative reporter running after different stories around the world. 

Bilal Hafeez (08:04): 

I mean, that’s great. And now you’ve just published this book or perhaps it doesn’t feel like just to you, but it’s out in the world, finally, A Shot to Save the World. What was your motivation for tackling this, because it’s not finance related, which is what you’ve done in earlier books? Why did you think you had a story to tell here? 

Greg Zuckerman (08:21): 

So, I was locked down like everybody else in this world, spring, early summer 2020, and it was a very discouraging time for us all. And I kept hearing about these efforts to build a vaccine, and what struck me is that it shouldn’t have been these companies and these efforts. Who was in the lead? It was the University of Oxford, it was Moderna, it was BioNTech. These are efforts, companies, academic groups that had never produced anything in their history. We’re talking decades of work, no vaccines, no drugs, nothing approved, and yet they were the ones in the lead. Where were the leaders? Where were the experts? Where were the people you would’ve expected? Where was Merck? Where was GSK? Where was Sanofi? I mean, Merck is the vaccine leader. They’re the ones who developed measles, mumps, and rubella vaccine that we rely on all over the world and yet they were not in the lead. So, I love that theme, the unlikely heroes theme, which frankly is… I don’t consciously do it, but I’m sure on some level I pursue these kind of stories. It’s in all my books. 

So, the first book I did is called The Greatest Trade Ever. It’s about John Paulson. Why was John Paulson the one to make 20 billion dollars from the financial meltdown in 2008? He was in merger and acq, he knew nothing about mortgages. I did a book called The Frackers about all the oil and gas that was discovered, the fracking revolution. It wasn’t BP, and it wasn’t Chevron, it wasn’t Exxon. Exxon was literally sitting on top of ground zero for this revolution and yet they were anywhere but America. It was a bunch of unlikely characters. Same thing with The Man who Solved the Market. So, there was that theme there with the vaccine chase. Moderna, not only had they never done anything historically, there were suspicions about them. Stephane Bancel, the CEO, was compared to Elizabeth Holmes. So, I just love that theme and I threw myself into it. 

Why it was outsiders and not Big Pharma that developed the vaccine 

Bilal Hafeez (10:12): 

Yeah. Yeah. I mean, that’s something I didn’t realise until I read your book about how Moderna and BioNTech, they hadn’t produced vaccines before. I mean, that was a real surprise. And why do you think this was the case that it was these outsiders that created it? I mean, COVID obviously was a big deal for the world and there’s these massive pharma companies. 

Greg Zuckerman (10:30): 

Yeah. It’s a good question. The first answer I’ll give is that until 2020, vaccines were seen as a loser business. It’s hard to imagine today, because Pfizer’s going to make 50 billion from their COVID vaccine, I think it’s going to be the biggest selling drug or vaccine in the world, but until this pandemic, most people in the pharma business saw vaccines as, I wouldn’t say a waste of time, but a frustrating process. 

You spend years on a vaccine, maybe it works, but even if it does, by then, maybe the illness has gone away, the disease has gone away. 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, 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. It’s not like a statin. I take a statin every day, I’m paid for it all the time. I just paid and went to CVS yesterday. So, in general, vaccines are not seen as very sexy business until recently by big pharma. That’s part of it. 

And part of it also is these companies, let’s say Merck. So, I write in my book about a rift internally at Merck and how some scientists said, in early 2020, “We should be the ones to step up. We are Merck. We’re the vaccine giants. We’ve produced all these previous vaccines. Why don’t we step up and save the world?” And others said, “Well, we don’t want to get distracted. We’ve got this franchise. It’s a cancer franchise that’s booming. We’ve got other things we’re pursuing. What if this doesn’t turn into a pandemic?” I would argue that BioNTech, and Moderna, and Novavax had less to lose. These companies didn’t have existing drugs to distract them and successful efforts, so in some ways they had less to lose and were able to throw everything at this new virus and develop a vaccine. 

The importance of earlier work on HIV 

Bilal Hafeez (12:29): 

It’s a bit like the innovator’s dilemma, I suppose. Why disrupt your own business? But one thing I noticed in your book, you spent a bit of time talking about vaccines from an earlier period to provide the overall context, because I suspect you were addressing the issue that a lot of people were sceptical towards the vaccines because it felt like it was just an overnight invention of some kind, but you made it very clear that there’s been a long history of vaccine development, in some ways everyone’s standing on the shoulder of giants, and so on, there’s a history here. Do you want to talk through about potted history of vaccine development, perhaps? 

Greg Zuckerman (13:01): 

Yes. And I did that consciously, right. So, I started off with a chase for an HIV vaccine, partly because I want the reader to be a little bit surprised picking up the book, but partly it’s because it reflects a theme that I think is really important, that as you suggest, there’s a long process involved and sometimes you go down a road in terms of the science and seemingly it seems to lead to nowhere. 

As an outsider, I was talking to people about COVID-19 vaccines, they kept talking about HIV. I was like, “Wait, HIV? We still don’t have a vaccine for HIV.” “No, no, no, Greg, we’ve learned so much along the way.” And then they would list them. “How to conduct trials. We learnt about the immune system. We learned about just the spike protein.” There was a spike protein that everyone chased for HIV. It didn’t work out. It was the best method to approach a vaccine, to develop a vaccine for HIV. It didn’t work out. HIV is just so much more challenging, it changes within people, from person to person, it attacks our immune system. There are kinds of reasons why HIV is much more challenging than this coronavirus, but there are a lot of similarities, and we learned lessons in this adenovirus approach, which eventually led to both the Oxford AstraZeneca vaccine, but also the J&J vaccine. That was developed by Merck and others in the chase for an HIV vaccine. 

So, for all those reasons, I thought it’s important to go back in history and teach a little bit about how vaccines are developed, what are vaccines, just an education for the immune system, so that if it encounters a piece of a virus, or a protein of a virus, or creates inside of you something that looks similar to the virus, then it knows to fight it off in the future. So, I go back in history for those reasons, but I want to plan to see in the reader, in that you the reader should realise how difficult it is to produce an effective vaccine. So yes, these COVID-19 vaccines are remarkable. They are, I would argue, modern science’s greatest achievement, but we were very lucky. We should be very grateful and appreciative because there’ve been so many failures in the past, and that’s why I start with HIV as well, because it was a failure and it should make us appreciate that much more so these COVID vaccines. 

How the vaccine was developed so quickly 

Bilal Hafeez (15:13): 

Why do you think the vaccine was developed so quickly, this COVID vaccine? 

Greg Zuckerman (15:17): 

So, I’ll give you two reasons. Partly it’s because of the years of work, that I write about. Go back in history, so mRNA we can talk about a little bit, but that, there’s years of work that went into that going into 2020, the adenovirus approach, again, that’s Astra, and that’s J&J, there was years of work. But the other answer is the first time in history we did things simultaneously. And what I mean by that is we developed, we tested, and we manufactured a vaccine for the first time simultaneously at the same time. 

And why they didn’t in the past have do that? Well, it’s just too expensive. Why would you spend billions and millions of dollars to a test and then manufacture a vaccine before it’s approved? Why would you build a vaccine before it’s approved? It’s just a waste of money. So, no one ever did that historically, and the reason we did it last year was partly, we were in the middle of a pandemic, but partly, there was money for that. There was money from investors, there was money from venture capital, etc, but also from governments around the world, especially Operation Warp Speed in the United States. 

So, talk about 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. Yes, 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. 

The key players in vaccine development from Moderna to BioNTech and what mRNA and adenovirus vaccines are 

Bilal Hafeez (16:55): 

And so let’s talk about some of the players. You’ve mentioned Moderna there, you’ve mentioned Oxford. Who were some of the players and what types of vaccines were they working on? Perhaps you could explain the nature of some of these vaccines, mRNA, viral vectors, and so on. 

Greg Zuckerman (17:06): 

Sure. So, Moderna is one that I emphasise in the book for a lot of reasons. They’re just a fascinating, interesting groundbreaking company started in Cambridge, Massachusetts, 2010, and they were dedicated to using messenger RNA. I guess I should spend just a couple moments talking about what this thing is. 

So, messenger RNA is a molecule. We all have it inside of us. It delivers messages within the cell from the DNA to the part of the cell where proteins are created. DNA can’t do it itself, it relies on mRNA molecules to deliver the message to part of the cell, and then these proteins are created that keep us alive. So, in other words, mRNA are these crucial molecules that deliver instructions within the body, and scientists always said, “Well, wow, what if we could create mRNA in the lab synthetically, just like we have natural sugar, sugar exists in nature in the world, but we can create in the lab as well, synthetic sugar. Same thing. We can create synthetic molecules.” And what would be the reason why they get all excited about it? 

Well, if you could create these mRNA molecules in the laboratory, then you can send any message to the body to create any protein and therefore create any drug or vaccine, and you’re off to the races. So, that was the holy grail for scientists for years, for decades, and most of them just as quickly as they got excited about the idea of creating messenger RNA, they gave up on the idea because mRNA gets chopped up almost immediately in the body and eliminated. Some vaccine hesitant people say, “Well, I don’t want mRNA in my body, it’s going to change my DNA.” No, it gets chopped up and eliminated, and that’s why no one wanted to ever work with this thing. 

There are other reasons as well, the body’s immune system fends it all. So, yeah, people got excited about mRNA, but most people, the conventional wisdom within the world of sciences, “Don’t waste your time on mRNA.” But people persisted. And there are scientists I write about it, and I can talk about, who spent years making steady progress. It’s a little bit like a relay race where they would run a lap or two and have good time, and then they would stumble and fall and pass the baton to somebody else. And Moderna, again, in 2010, there were a startup and they threw themselves into developing drugs, really, based on mRNA. And they were originally called Moderna Therapeutics, and they spent years on it. And they met frustration after frustration. 

And this guy, Stephane Bancel, the CEO, was a very hard charging, difficult CEO. People had a tough time pleasing him, keeping up with him, they early on were collapsing in the office and in the parking lot, hitting their heads at home, and they rushed to the hospital, and he would fire people left and right, but he was inspirational at the same time. He had a vision. He said, “We believe in mRNA. We are going to be the one someday to save the world, to step up in a crisis.” And those who survived working there early on were inspired by him, and they, by the end of 2019, on the eve of this pandemic, were, I would say, the subject of a lot of scepticism, if not worse, maybe even accusations within the biotech world because they hadn’t proven anything, they’d given up on drugs, they’d shifted the vaccines. They weren’t very transparent. They had raised billions and billions of dollars without any proof of concept. 

And some people accused Bancel of being Elizabeth Holmes-like in that, while he wore a black turtleneck, that was part of the similarity, he raised a tonne of money, and often from outsider type people, not biotech specialists, and that raised suspicions within the biotech world, but also he’s a showman in some ways. He’s an outgoing guy. He’s not a scientist. He’s a Harvard MBA, he’s an engineer, and here he was saying, “Oh yeah, we’re going to be the ones to save things.” “Well, really, Stephane, what have you done so far?” They were saying by early 2020. The stock was down off about 15% from the IPO price, and yet in early 2020, Bancel and his colleagues said, “We got to be the ones to step up.” It’s a very unlikely story. 

Bilal Hafeez (21:09): 

Wow. And then obviously, they ended up creating the vaccine, so all of that hard work was for something. And what about other groups of companies involved in this? You mentioned Oxford, for example, I mean, what were they doing? 

Greg Zuckerman (21:20): 

Yeah. So, Oxford, it was led by Adrian Hill, who’s a character, to say the least, within the world of science. He’s a senior scientist there, an academic, and he has spent his life dedicated to a vaccine for malaria, but he worked on other vaccines as well for other illnesses, other diseases, and for decades, we’re talking years and years, he and his colleagues had tried to develop vaccines and hadn’t succeeded, and yet Hill is notorious within the world of science. Probably the most detested, unliked scientists, at least that I can identify, because despite his own lack of apparent success, by end of 2019, early 2020, he was very difficult on others within the industry. In other words, he would get up in meetings and rip into other people’s approaches, “That’s not going to work. Why do you think that way? That’s a foolish approach.” Things like that, which academics can be tough on each other, but fewer as difficult and hard as Adrian Hill. Very self-confident in his approach. 

And he was using something called the adenovirus approach, which was developed earlier in history, and that was by Merck. And I talked about HIV, they’re the ones who originated it, and they failed and gave up, and it was an embarrassment, and they actually harmed people, and they shuttered that whole effort, Merck did in terms of HIV. But a couple other people said, “Well, maybe we can improve on what they’ve done.” And one of them was Adrian Hill and his colleagues at University of Oxford. Adenovirus approach, as opposed to mRNA… mRNA, you’re sending a message, basically, with mRNA, to the body to create a protein. 

And obviously, in this case, the protein is the spike protein. What you’re doing is telling the body to create a spike protein. Why? Because you’re educating the body so that the next time, if it ever encounters the spike protein for real with the actual virus, it’ll know, “Ah, I’ve been taught by that vaccine, I’ve been taught that it’s something I should be fighting off, it’s foreign, it’s something harmful, and then you go fight it off.” So, the mRNA sends a message to the body to create the protein and that’s why it’s a protective vaccine. The adenovirus approach, which is the one that Adrian Hill in Oxford and it’s also Johnson & Johnson in the United States and elsewhere, they use that approach. Same idea. You create spike protein, but they do it through a virus. In the case of University of Oxford in AstraZeneca, it’s a chimpanzee virus. You’re using that as a courier into the body. 

And the logic there being that viruses, their job is to spread and get within the body, so if you can use a virus to get inside the body and send the genetic message, it’s the same idea. You have the body create… the message is to create the spike protein. If you can have the body create the spike protein, then you’ve taught the body, you’ve educated the body and taught the immune system to fight off this virus in the future. It’s just that the University of Oxford Astra approach is to do that as opposed to with mRNA molecule, you do it through this chimpanzee virus, and it’s harmless. It’s been rendered harmless. You can play with it in the lab and change the genetic makeup of virus such that it’s not harmful. 

So, Adrian Hill, they were in the lead for a long time. In 2020, there was an assumption in the labs at places like Moderna and BioNTech that university of Oxford would be the winner. And I write about the internal pressures there and how they lost the lead, but in the end it was an effective vaccine, it’s just not quite as effective as the mRNA ones, the BioNTech Pfizer one and the Moderna one. 

Bilal Hafeez (24:53): 

And the BioNTech team that you’ve mentioned, they seem to be the highest profile in terms of personalities, the scientists Sahin and Tureci. What were your findings around them and what was their approach? 

Greg Zuckerman (25:03): 

Yeah. They’re fascinating characters in their own right. Ozlem Tureci and her husband, Ugur Sahin, they’re immigrants from Turkey, moved to Germany, started this company, BioNTech, and their focus was cancer. So, they spent years building cancer vaccines, and potentially drugs, using different approaches. But what’s fascinating is that they weren’t infectious disease experts and yet in the eve of this pandemic in 2020, they’re having breakfast in an outdoor cafe I write about, and they start talking about this new virus that was spreading. They had read about it in the Lancet Report, and what struck them, especially Ugur Sahin, was that there was asymptomatic spread of this disease. 

And he said to himself, “Wait, hold on a second. We had these earlier coronaviruses and they were pretty dangerous and lethal, but why did they not spread the world? Because we could isolate those infected. But if you’re telling me that there’s a family that had a visit in Wuhan and they brought back this virus back home and they didn’t know who was symptomatic and who wasn’t, then it’s going to be impossible to isolate people. And actually by now…” this is in January 2020, he’s saying, “by now, I’m sure this is spreading the world.” He looked into it, and Wuhan is an enormous city. It’s bigger than the US cities of Chicago and New York combined, and he said, “Wait, hold on a second. There are flights going everywhere. This thing is spreading the world. We think… we’re not sure, we’ve never developed a vaccine, never developed a drug, but we’ve got this approach using mRNA that we think could work, so let’s throw ourselves into developing this vaccine,” and to their credit. 

I don’t know about you and your audience, but in January 2020, I was literally walking through Heathrow without a mask. I think I tried putting one on, people gave me a look and took it off, and most people were not conscious or at least not focused on this virus, and Ugur Sahin was scared to death and worried about the future. And he said, “We’re going to be the ones to step up.” So, to their credit, they threw themselves into this thing and they convinced Pfizer to work with them. And it wasn’t easy. In hindsight, we need to be a little more appreciative of this vaccine for various reasons, but among them is Ugur Sahin first talked to a senior scientist at Pfizer, Phil Dormitzer, and Dormitzer said, “I don’t think we want to work together on this thing. Who knows if this virus is going to go away. We’ve got so much else going on. We’re working on a flu vaccine.” And to his credit, Ugur Sahin persisted and he convinced another senior scientist, Kathrin Jansen, to work together and the rest is history, but we need to be appreciative of their efforts. 

Bilal Hafeez (27:42): 

Yeah. I mean, one thing that so strikes in you describing all of these efforts are just how unexpected some of these developments were, people working on one thing and then they pivot towards this, and face some opposition, and they overcome it. So, I mean, it really is something for the movies about this all. 

Greg Zuckerman (27:58): 

I hope so, yes. Yes, there was drama there and it’s very unexpected, right. And again, I don’t think we appreciate the good fortune we’ve had. Had this virus arisen in 2006, 2017, earlier, it likely would’ve been years of waiting for a vaccine. And now we have the luxury of debating whether we should have a third shot or even a fourth now we’re starting to talk about maybe, and at least in the west, obviously, in other parts of the world, we’re not as fortunate. But we have the luxury of debating whether we are overdoing it with the vaccines, if there’s a segment in the population that resist the vaccines. 

Well, it wasn’t a forward conclusion that we would have these vaccines or that they would be nearly as effective. Even the people within these labs and these companies that I talked to leading up to the November 2020 data that proved how effective they were, they were nervous. They weren’t sure. They were thinking maybe 60% effective, they would take it. That’d be fine. You think about the flu vaccine, it’s about 50, 40, 50, 60% effective each year. So yeah, to your point, there was a lot of unexpected turns that we need to be appreciative of. 

Bilal Hafeez (29:06): 

And you also mentioned Novavax as well in your book. I mean, what was the story behind them? 

Greg Zuckerman (29:11): 

Yeah. I love the Novavax story, partly because it teaches me a lesson. So, I’m an outsider to the world of science and I’m oriented to the financial markets. So, when I see a stock, like Novavax in January 2020, that was trading at $3 a share, and we all know them, right Bilal? We all know these biotechs that have been promising for years and failing after failing. And frankly, as a journalist, I generally dismiss them. The market’s pretty efficient. If stock is trading at three, I figure, “All right, I’m not going to waste too much time.” And that was what was happening at Novavax. They were running out of money, they only had a few months left of cash, they were going to have to close down. They had failed at everything. Name a virus or some illness, disease, they had tried to develop… I mean, I’m exaggerating a little bit, but maybe a half dozen, maybe more, different vaccines that hadn’t worked. 

But the lesson, for me at least, is that there are a lot of dreamers out there, and Greg, don’t dismiss them. And there were dreamers at Novavax and they would argue, and I think rightly, that they were making progress. And yeah, the market didn’t appreciate it, and yeah, they had no concrete examples, but they were improving their approach. And their approach is called a protein subunit approach, which is a little bit more traditional. Basically, you create the key protein of a virus in the laboratory and then you figure out a way to get it into the body. And they had an approach that they believed in, and to their credit. There are all these dreamers out there, both in the world of biotech, but elsewhere, and I’ve learned a lesson not to dismiss them. It’s not to say that every dreamer is going to succeed, but I don’t know. 

There’s this guy, George Mitchell, in the United States who believed in attacking this and drilling from this formation called shale, and everyone thought he was a fool, it’s too far down, it’s too expensive, don’t waste your time. And he was right and they were wrong. I don’t know. Jim Simons believed in the quantitative approach, and most people didn’t at the time, and they dismissed him and what he was doing. So, I’ve learned to at least take a coffee, hear out the dreamers, see what they’re thinking about. And that’s why I write about Novavax, and they have developed a very effective vaccine. 

Now, they’re a small, tiny company, no one would work with them, unlike Pfizer and BioNTech, etc, so it’s been difficult for them to produce, to manufacture their vaccine. And I do think eventually, in the next year or so, it will be approved. There are some places in Asia that actually have started to use that vaccine. I think it’s going to be important in places like that and elsewhere because it doesn’t have to be kept at cold temperatures like the mRNA ones, and it’s a very effective one. But there are lessons, just to me at least, as a journalist and to investors as well, I think. 

Bilal Hafeez (31:47): 

And then you mentioned manufacturing there. I mean, how important was the manufacturing and distribution side of things? I mean, how did that all come about so quickly? 

Greg Zuckerman (31:53): 

Yeah. It came up quickly because people worked 24/7 and destroyed themselves. And I’ve talked to some of these people within the manufacturing effort at some of these companies. And someone I’m thinking of had stage four cancer and she kept coming in. There’s this gentleman who runs manufacturing at Moderna named Juan Andres, so I just find it just fascinating because he is not a scientist, but he got nervous about the pandemic early on and he told his family, and he started stocking up on tissue paper, and toilet paper, and food. He bought a third refrigerator for his basement, and his family thought he was crazy, he was nuts. They were rolling their eyes. But then this is like February, even January maybe of 2020, but by March 2020, his mother-in-law had died of COVID and the family, like the rest of us, were sufficiently scared about it. 

So, Juan Andres is just a fasting individual, and he runs Moderna’s manufacturing. And listen, they frankly are frustrated because they’ve gone all out over the past year and they’ve developed these effective vaccines and yet there’s a segment of population that won’t take them, and there’s also a segment of the population that points a finger and accuses them of certain things, of either harming people, or being focused on money, so I feel for them. They’ve gone through this emotional rollercoaster and they’re exhausted, they’re physically drained, they’re emotionally drained, and they did it because they just went all out and it’s a very difficult process, to your question. The manufacturing side and the distribution, there were mistakes made, but it was a pandemic, they were making the decisions on the fly. 

The outlook for vaccine breakthroughs for other diseases 

Bilal Hafeez (33:19): 

And after all of this, I mean, you’ve talked about all these developments in mRNA and all of these acceleration of research has happened, I mean, what’s your sense of the future of vaccines? I mean, obviously, that’s a big topic, but I mean, outside of dealing with COVID, I mean, what other things do you think we’ll see? I mean, will there be something for cancer, for example, or something like that? 

Greg Zuckerman (33:39): 

So, I’m a financial journalist so I’m inherently a little sceptical, maybe too much so. So, I go into this saying, “Well, yeah, they’ve succeeded with COVID but there’s never been any success with using mRNA or adenovirus approach… I guess, the adenovirus maybe has been more progress on some other viruses and illnesses, but we haven’t really seen anything with cancer yet to get excited about. So, I am a little bit sceptical but I’m also very hopeful. As you know and your audience knows, when there’s been success and there’s been money made, then talent and other resources are suddenly flocked to that area. So, the best and brightest are now backing mRNA approaches to different things, and they’re throwing themselves into new efforts. And from talking to these executives and these researchers, Ugur Sahin and others, I know that they’re not slowing down, they’re going all out to go back to their original passions. 

So, Ugur Sahin and Ozlem Tureci wanted to create a vaccine for cancer. They’re back at it, and they’ve got money now, they’ve got resources, they’ve got talent. And the Moderna folks are focusing on things like RSV, which is a virus that kills children and it kills elderly, CMV, another virus, others are taking on Aids, and Adrian Hill, malaria. So, again, going back to my point with Novavax, you don’t want to be too sceptical. People like myself, and I’m going to be hopeful, I’m going to be optimistic that they’re going to prove it to us again, and they are… The thing about this biotech world that I’ve learned is just, they’re resilient, they’re persistent, they’re creative. Everyone just focuses on Silicon Valley and innovation in the tech world. Well, the biotech world is just as impressive, if not more oppressive. So, I’m going to hold out hope they’re going to amaze us in the next years. 

What made Jim Simons the top investor of all-time 

Bilal Hafeez (35:26): 

That’s great. And I definitely urge all our listeners to get hold of your book, A Shot to Save the World. Now, given our audience, a lot of them are financial people. I have to ask you about your previous book, The Man who Solved the Market, an excellent book. I really enjoyed reading it. It’s about Jim Simons. And perhaps you could just talk a bit about him and what made him so special and why you wrote that book. 

Greg Zuckerman (35:45): 

Yeah. So, Jim Simon’s is the greatest… I don’t know what you call him. Investor? Do you call him investor or speculator, money maker, I guess, that the world of finance has ever seen. The returns are ridiculous. For those who aren’t aware, the Medallion Fund is key hedge funds. 66% a year for decades, and that’s before fees, but that’s a ridiculous return. Even last year, they were up, I believe it was 49% in 2021. And they’re the original quants. They are the pioneers. And this approach, obviously, has swept Wall Street, but swept broader society. Predictive algorithms, all your Netflix and Facebook, etc, they govern our lives, and these guys were doing predictive algorithms, building them decades ago, decades ago. We’re talking the ’80s, early ’80s, that kind of thing. And then also the most secretive firm in history. It was a very difficult process writing that book, getting people to open up. Still not sure why they talked to me. 

So, to your question, what makes Jim Simons different? I’ll give you an answer. The answer is he is both a scientist, he’s a groundbreaking mathematician, he’s one of the greatest geometer of our times, so he knows the world’s quantitative research, building algorithms, etc, but he’s also a guy that you want to have a beer with, or in his case, gin and tonic, he’s a chain smoker, he’s a funny guy, and he understands people motivations. He could recruit better than anyone I’ve ever seen. He’ll say, “Just come on over, work for a day, spend a week with us, give a lecture. You might find it challenging.” He knows what makes people tick, and he built a very, very unique culture. So, I would argue, yeah, there’s smart quants there, but there are a lot of smart quantitative firms, etc, but they’ve got a very unique culture in that it’s very flat. Everybody knows what everyone else is working on. It’s an open architecture. 

There’s one fund the Medallion fund… they’ve got a couple others that are outside funds, but the key Medallion funds, everyone works together, it’s not hierarchical, it’s very unique. Everyone knows the secrets. Anyone can look at the secret sauce, it’s an amazing thing. And then you say to yourself, “Well, why doesn’t the secret leak out then?” Well, part of it was the beauty of what he has done, and wasn’t conscious, it was serendipity, is he’s an academic, or was an academic, and he really only hires academics, and those academics are not going to go work for Goldman or some startup hedge fund, they’ll go back to academia after they’re done over there, and they make so much money, they don’t need to go work for another firm. So, it’s remarkably unique. Internally, everyone shares information and there aren’t silos. 

I mean, you know as well as anyone else that the key hallmarks of many Wall Street firms is there are silos, and there are good reasons for these silos. She does really well this year, she makes a lot of money, let’s give her a team, let’s give her a fund, etc. And that does not happen at Renaissance. They just work together, unlike most other firms that I’ve ever seen. 

The importance of culture 

Bilal Hafeez (38:32): 

Yeah. That’s great. In fact, based on your book and also some of the writing I’ve seen on them, I really did find the culture they’ve built there very inspirational, and I always like this whole idea of open architecture ways of doing things. And that’s something, hopefully, we’ve tried to do at Macro Hive as well. And what I did find working at banks is that they work on the opposite side. So, if you are open architecture minded inside of a bank, everything is just pushing you against that to be siloed, and so you are always swimming against the tide. And what I found is since leaving big banks and working outside, it’s just so much easier to create that environment. And I guess there’s a path dependence in banks and cultures just form and people get used to that and they think that’s the only way to do things, and they stay doing that. Because the question I’ve always thought is, okay, people should know that’s what RenTec does, why don’t they recreate it? But I just think a lot of people just are so used to a different way of running things that they find it hard to replicate that. 

Greg Zuckerman (39:22): 

That’s fascinating. I didn’t realise. So, that’s the instinct within the bank, just to fight in that open architecture and prevent that from happening. And I know that’s the case at quant firms. I’m thinking of one in particular, I know a senior person there, they’re a very good quant firm, but he said, “Greg, we would love to operate like Simons… Simons doesn’t run things anymore… but like Renaissance does, and we just can’t.” Like you said, cultures evolve, and maybe if they started to scratch, they would, but at this point, it’s too late. 

Bilal Hafeez (39:48): 

Well, I did also want to ask some personal questions as well, Greg. One, given that you are in the world of finance, you’ve researched, you’ve investigated a lot of great firms and so on, what’s the best investment advice you’ve ever received? 

Greg Zuckerman (40:01): 

Well, I’ll give you just some observations from my reporting. I wish I’d gotten better investment advice, but I’ve seen a lot, and one is in terms of running a fund, and that’s not to get too big. And it’s going to sound basic, but people make that mistake over and over again. So, usually, I wrote my first book about John Paulson, he made 20 billion over two years. On top of the world, super smart guy, but he’d never done anything historically until then that was huge. And then subsequently, he grew his fund way too big. They got close to I think 40 billion dollars and returns were never nearly as good. He was as smart as he was in 2005 and 2006, when he was putting on his trade, the greatest trade, but he managed way too much money. And frankly, going back to Jim Simons, that’s one of his secrets. 

So yeah, I have a lot of reasons why he’s better than everybody else, but when we’re talking about the Medallion fund, the key Medallion fund, he always returns all the profits every single year. They kept the fund flat. For a while, it was five billion, then it was 10 billion. Every year, they could have raised much more obviously, but they handed it back. I’ve seen it over and over again. And then everyone always says, “Well, I’m going to be the one to be able to manage more money,” and it never works out. So, that’s one. 

Listen, one thing I’ve learned from writing that book is you don’t want to go up against Jim Simons and trade short term. These guys have more data, better data than anybody else, and it’s short term oriented. So, there is some lesson there of being more of a longer term investor, because Simons and Renaissance, their holding period is… internally, they say moments to months, more moments than months. So, we’re talking really short term oriented, so they don’t do longer term trades. So, to the extent that one can, there’s some true advantage there. Those are two lessons I’ve developed. 

And frankly, this is just more of an observation. The biggest investors, the billionaires, the most successful traders are just as neurotic and insecure as the dentist trading his or her portfolio. You’d be surprised. I mean, you probably know as well as I do, but sitting across some of these guys, they’re checking their Bloomberg, not so much they’re checking their own portfolios, they’re checking other people’s portfolios too. And my best stories are always a tip I get from some rival, some big name hedge fund manager, and then I’ll go to a conference and the hedge funds be, “Why are you so negative on the industry, Greg? You always write and then cri-” “Well, geez, you guys are giving me the calls, you’re the ones tipping me off.” They’re very, very competitive and neurotic, and even going into their forties, fifties and sixties of age… Leon Cooperman, I write about and talk to, “Greg, you only write about me when I’m losing money. Why don’t you write about me when I’m…” So, they’re on edge and they care about the reputation, and they could buy islands, you would think they wouldn’t care anymore, but they do. 

Bilal Hafeez (42:57): 

And when they do buy an island, they get paranoid that their rival’s going to buy a bigger island or build something in front of their island or their property. It just carries on. The other question I wanted to ask was about productivity hack, how you’re able to do so much. You’re writing books, doing your day job. Do you have a system of some kind, and you are interacting with lots of people all the time, do you have a note taking system, and how do you bring it all together? 

Greg Zuckerman (43:18): 

The key to my productivity is having a deadline. So, if I didn’t have a deadline, I’d be wasting time and enjoying myself, but for whatever reason, each of my books, maybe because I write about timely things, I always have a tight deadline that I set with my publisher, partly it’s self-imposed, frankly. I could have taken more time with it, but I always feel, I want to turn it out. And at the Wall Street Journal, we have a deadline. So, I have found that there are more hours in a day than you would think, meaning that like when I was doing A Shot to Save the World, literally, I was on average, going to sleep at 3:00 AM, and I was taking showers at 2:00, 2:30 AM before I was going to bed. And then you get five hours and you’re not bad. 

And I keep the Sabbath, so for 25 hours, I have no electronics, no TV, no nothing, and that’s been very helpful. When I was young, I resented it and it really bothered me. My friends were enjoying themselves and here I was just at home with my family and just eating and reading and sleeping, and now I could get more of it, it’s a gift. And it’s hard to impose that upon oneself, if not for religious reason. But to the extent one can develop it. I can’t speak for others. For me, it’s been very helpful. I’m crazed most of the time, but then for 25 hours each week, I just shut things down, and that to me, has been helpful. 

Books that influenced Greg:

Den of Thieves (Stewart), Liar’s Poker (Lewis), Barbarians at the Gate (Burrough) and Indecent Exposure (McClintick) 

Bilal Hafeez (44:42): 

Yeah. I think that’s great. I mean, I think that everyone should take some form of time out, like digital Sabbath or something. It’s really important to detox oneself. Now, you’ve written lots of books, but presumably, some books have influenced you as well. Are there some books that spring to mind that have influenced you? 

Greg Zuckerman (44:57): 

Sure. So, the classic financial narratives, Den of Thieves, Liar’s Poker, Barbarians at the Gate, but there’s one that I want to make a plug for that I loved, and I don’t think enough people appreciate. It’s called Indecent Exposure, and it’s about Wall Street, it’s about Hollywood, but a wonderful time when companies were getting bought and sold, and conglomerates were getting into Hollywood, and their personalities. That’s by David McClintick. I really enjoyed that. So, those all helped me in terms of the narrative side of things. And then I’m just an avid newspaper reader. So, I’ll read everything, and I’ve always done so, and I believe in newspapers. I work for one and there are a lot of great ones out there, so that’s helped me as well. 

Bilal Hafeez (45:39): 

That’s great. And your book, A Shot to Save the World, I mean, how can people get hold of the book? 

Greg Zuckerman (45:42): 

It should be available at Amazon, other kinds of online sources, your local bookstore, potentially, or hopefully. And I love hearing from people. Some of my best sources are people that said, “Greg, I read the article, I liked it, but…” Or, “I read your book and you missed this. I like the book, but…” I love that. So, constructive criticism is how I grow, and if your audience wants to reach out, I’d love to have a relationship and interactions. 

Bilal Hafeez (46:06): 

Great. And what’s the best way for people to connect to you? 

Greg Zuckerman (46:08): 

Email to Wall Street Journal, [email protected]. I’m also on Twitter. I’m also on LinkedIn. Those are the social media that I do most. 

Bilal Hafeez (46:17): 

Okay. So, I’ll include a link to the book, the Amazon link. If you can get an independent bookshop, buy at a bookshop, not Amazon, but otherwise Amazon and I’ll include the contact links as well. But with that, thanks a lot, Greg. It was excellent speaking to you and good luck with the book. 

Greg Zuckerman (46:30): 

Thank you and keep up the great work. I really enjoyed the podcast, interesting guests, and observations, and conversations. So, I look forward to keeping track of your work as well. 

Bilal Hafeez (46:38): 

Great. Thanks a lot. Thanks for listening to the episode. Please subscribe to the podcast show on Apple, Spotify, or wherever you listen to podcasts. Leave a five star rating and a nice comment and let other people know about the show. We’d be super grateful. Also, sign up to become a member of Macro Hive at macrohive.com. We’ll be back soon, so tune in then. 

Bilal Hafeez is the CEO and Editor of Macro Hive. He spent over twenty years doing research at big banks – JPMorgan, Deutsche Bank, and Nomura, where he had various “Global Head” roles and did FX, rates and cross-markets research.

(The commentary contained in the above article does not constitute an offer or a solicitation, or a recommendation to implement or liquidate an investment or to carry out any other transaction. It should not be used as a basis for any investment decision or other decision. Any investment decision should be based on appropriate professional advice specific to your needs.)