Industry Updates Volume 22Read Now
SARS-CoV-2 Pandemic - Ongoing Milestones;
- nThis “Extended Period of COVID-19 Restrictions” Scenario will likely lead to further Booster campaigns around the world, further exacerbating the current vaccine inequity/nationalism issues
- Omicron-driven restrictions have become particularly pronounced with respect to travel. Examples:
- Many thousands of flight cancellations or disruptions world-wide
- Israel and Japan have restricted all foreigners from entering these countries
- Germany and France have banned the UK
- UK put the U.S. on its red list
- China has locked down 13 million people in a single city, given only 100 infections
- It is questionable how meaningful these international travel restrictions are in reality, given that Omicron has already spread worldwide
- Indeed, the original travel ban on the Southern African countries has recently been revoked
Vaccines, Therapeutics and Vaccination in the West
- At the margin, the existing Wuhan-strain Moderna vaccine shows greater protection than Pfizer, but Moderna’s CEO has still disclosed plans for an Omicron-specific vaccine
- Living with an endemic COVID-19 virus for years-to-come is looking ever more probable, raising the inevitable question of ongoing vaccination strategies, leading to an ongoing need to update vaccines
- Johnson and Johnson looks like it could exit the market, following recent negative comments from the FDA regarding further blood clot risks in younger healthy females
- However, as with the other vaccines, studies have shown that the J&J shot may still protect ‘enough’
- Notably, AstraZeneca which has similar issues to J&J has still not received U.S. FDA approvals
- A number of newer vaccines are coming forward - most significantly Novavax - which following multiple manufacturing-driven setbacks, has now received emergency approvals from the WHO and the EMA
- The EMA has also placed an order for up to 60 million Valneva doses
- This is the first large-scale use of a WIV-base vaccine in the West
- The FDA recently issued Emergency Use Authorizations for oral therapeutic drugs from Pfizer and Merck
- Both are moving to production - they will be expensive, costing $400-$700 per treatment course, vs. $5 - $40 per dose costs for vaccines
- The U.S. placed a $5.3 Billion order for Pfizers’s Paxlovid drug - 10 Million treatment courses (likely less than expected demand) - some Paxlovid is available now, more to come in next 6 months
- Paxlovid is claimed to have an almost 90% efficacy in preventing a need for a hospital stay for a COVID-19 infected patient
- Some emerging issues of side-effects with the Pfizer and Merck therapeutics have been noted, along with Merck’s efficacy dropping from being only at 50% to 30% in more detailed trials
- Refana was surprised that the FDA approved the Merck therapeutic
Differential Death and Vaccination Rates
- Exhibit 3 shows significant differences in ‘excess death rates’ since last year
- These excess deaths can be due to COVID-19 infections and also additional deaths arising as an indirect effect of COVID-19, such as under-treatment of other ailments
- In most countries, the ratio of reported COVID-19 deaths to the overall excess mortality is consistent
- Russia is an exception - they may have been only reporting approximately 20% of COVID-19 deaths
- Exhibit 4 shows significant differences in the vaccination/Booster rates world-wide, by country - the U.S. represents approximately a ‘median’ position in terms of vaccinations
- Countries with equal/lower vaccination rates than the U.S. have higher cumulative death rates
- However the correlation does not appear to work in the opposite direction, i.e., that as vaccination rates increase above the average in the U.S., this does not correlate proportionally with lower cumulative death rates
- It appears that as vaccination rates increase above the U.S. threshold, the more significant reduction in the cumulative death rate are driven by the additional public health measures and degree of compliance, as indicated in Japan, Canada, Israel, Germany, Sweden and France
- Exhibit 5 shows that the Upper Middle Income countries have now fully caught up with - even slightly exceeded - the vaccination rates of the High Income countries
- Lower Middle Income countries are at half this level and should catch up on a two-shot basis (but probably not Boosters) during 2022
- Lower Income countries however are still only at 12 vaccinations per 100 people, which, on a two-shot vaccine regime, is only a vaccination rate of 6% of the population
- Without a major change in global policies and cooperation, many countries world-wide are unlikely to achieve satisfactory vaccination levels in 2022
Three Key Questions
- Is Omicron the ‘last’ major Variant of Concern, leading to a final transition from COVID-19 Pandemic to Endemic, and a need for ongoing maintenance (i.e., Boosters) against localized flair-ups of COVID-19?
- Or, will other Variants of Concern continue to emerge from less vaccinated areas of the world, or from emerging ‘reservoirs’ of COVID-19 virus in animals, e.g., white tailed deer, rats, dogs, cats, etc.?
- When will the world begin to collaborate more constructively to solve the COVID-19 Pandemic, getting to more consistent and complete world-wide vaccination rates and the ability to combat local/regional outbreaks of the disease?
Outlook for 2002
- Numerous commentators are predicting a ‘new normal’ in 2022, where we will have to learn to live with an Endemic COVID-19
- The implications are that with the ever greater availability of vaccines from the second half of 2022, an increasing proportion of the entire world's population will be vaccinated
- Ongoing Booster vaccination campaigns are to be expected for the coming years, with the frequency determined by the speed with which vaccines wane and the frequency and severity of highly transmissible or dangerous new variants
- Refana predicts that the recourse to travel bans, lockdowns and long quarantine periods will be abandoned progressively during 2022 as the futility of these actions becomes ever more apparent
- What the world is waiting for is a next generation vaccine that is more effective in: 1) The duration of the protection it provides and 2) Being able to further withstand new Variants of Concern - which is exactly what Refana is working on
- This appears to be the only ‘Silver Bullet’ on the horizons in Leading Countries
- Refana’s validation of its Delta-specific vaccine is continuing in a pre-clinical trial at the Illinois Institute of Technology Research Institute (IITRI) in Chicago
- The transgenic mice, who have the ACE 2 human gene receptor, received their first vaccine shot three weeks ago, and will receive their second shot next week
- Meanwhile IITRI will commence growing the certified Omicron virus strain they received from the CDC
- Refana’s larger trial will now seek to test a bivalent vaccine - using both the Delta and Omicron variants - on a statistically valid number of animals, and in a comparison with mRNA vaccines
Follow this link to see the graphs and insight in exhibits 1-5
Industry Updates Volume 14Read Now
From the Known…
...to the Highly Unknown - Omicron Variant (Breaking News - Refana is Monitoring Carefully)
- Global impacts to date: 260+ Million confirmed cases, 5.2+ Million confirmed deaths
- Delta variant-driven caseloads increasing again world-wide - some locations back to previous highs
- This has led to lockdowns and/or severe restrictions in Europe (e.g., Austria, Germany), tightening in the UK, and significant caseload increases and selected restrictions in the U.S. and Canada
- Three European countries experienced riots over the past two weeks - protestors reacted to the increasing social restrictions and the threat of compulsory vaccine mandates to combat Delta surge
- U.S. caseload range.: Florida (best) at ~30 cases/100K, Michigan (worst) at ~390 cases/100K (7 day rolling average) - a 13X difference
- Multiple court challenges ongoing against U.S. vaccine mandates
- Dr. Scott Gottlieb, former FDA Commissioner, hypothesizes that with waning vaccine immunity levels, the number of “breakthrough’ infections is much larger than what is being reported
- ~8 Billion vaccine shots administered globally; however, 70% of these in 10 countries; 30% in China
- According to the WHO, for every 100 people in high-income countries, 133 doses of COVD-19 vaccine have been administered, while in low-income countries, 4 doses per 100 people have been administered → Clear indication of ‘Vaccine Nationalism’ at play
- In the U.S., recent CDC analysis suggests that if someone is not vaccinated, they are:
- 5-6X more likely to get infected with COVID-19, even if previously recently infected
- 10X more likely to end up in hospital if infected
- 11X more likely to die from COVID-19
- Fully-vaccinated people make up less than 1% of COVID-19 deaths in the U.S.
...to the Highly Unknown - Omicron Variant (Breaking News - Refana is Monitoring Carefully)
- We have entered a frequently predicted - and almost inevitable - situation, where a major new, highly differentiated, variant has emerged from countries with much lower vaccination rates → Omicron
- World Health Organization and others have been warning for months that Vaccine Nationalism and hoarding of supplies by the richest nations would ultimately prove counterproductive
- Many large populations, for example in Africa, are still almost completely unvaccinated, and thus remain strong breeding grounds for new strains of COVID-19
- Despite all these prior warnings, Omicron’s emergence seems to have caught the world unprepared
- So far, small numbers of Omicron cases have been detected in multiple countries - including Australia, Belgium, Botswana, Canada, Denmark, Germany, Hong Kong, Israel, Netherlands, UK, and South Africa - suggesting that the variant is already spreading (Note: Current data is quite limited)
- Many countries - including the U.S. - have already banned flights from 8 countries in Southern Africa
- This may prove futile if Omicron didn't originate there, or has already escaped in sufficient volumes over the past 2-4 weeks before the initial sequencing in South Africa identified this new variant
- Israel and Japan have banned all travel with incoming foreigners
- Fully-vaccinated returning Israelis - even w/negative PCR tests - will need mandatory quarantining
- These measures were introduced for two weeks, to give time to assess a more complete risk profile
- The severity of Omicron infection, and its ability to overcome vaccinations, is unknown at this point
- Currently the world is lacking key information about this new variant - other than the highly concerning point that Omicron has 50 mutations, of which 32 are on the Spike Protein
- This suggest that the Spike Protein-based vaccines’ ability to protect may be further weakened
- Both mRNA manufacturer CEOs have publicly reiterated this point this over the past few days, building on Pfizer CEO Alber Bourla’s similar comments from six months ago
- However, Refana has previously observed that 'WIV-centric’ countries have suffered much less severe Delta surges than 'mRNA-centric’ countries
- Regeneron and Eli Lilly have already reported their COVID-19 therapeutic solutions are less effective vs. the Omicron variant; no updates yet re Omricon’s impact on the Pfizer/Merck/AstraZeneca solutions
- Meanwhile, Merck’s efficacy levels have been lowered from 50% to 30%, given further testing
- South Africa has protested that it is being unfairly punished for ‘discovering’ this variant
- For both the Alpha strain, discovered in Britain, and the Gamma strain, discovered in South Africa, there was no evidence that those variants had actually emerged in those countries
- Rather, they have much better testing and sequencing infrastructures than their neighbors
- The timing of Omricon’s arrival is unhelpful:
- The recent world-wide unrest and protests to the restrictions, mandates and lockdowns could further amplify if these measures need to be strengthened
- Dr. Scott Gottlieb, former FDA Commissioner, summarized the current Omicron situation well over the past weekend (28 November 2021): https://www.cbsnews.com/news/transcript-dr-scott-gottlieb-on-face-the-nation-november-28-2021
Increasing Infection, Decreasing Deaths?
Industry/Market Responses to Omicron
- While new infection rates from Delta had already climbed dramatically in many countries - and death rates have also climbed - the impacts are not as bad as in previous waves
- This is evident even in countries with very high vaccination rates, e.g., Ireland, which has experienced high levels of breakthrough infections with Delta
- Very roughly, it could be said that the death rate has fallen from 2% to <1% of those infected with Delta, compared to the earlier death rates from prior strains
- This does not mean that Delta is inherently less dangerous
- Indeed, Delta could be significantly more dangerous on its own, but the combined impact of higher vaccination rates and more effective treatments have helped reduced the death rate by half
- It is important to bear this in mind in analyzing the threats of Omicron
- If the Omicron variant breaks through the current generation vaccine protection firewalls, overall COVID-19-related death rates could rise again
Industry/Market Responses to Omicron
- Omicron is likely to force the Western market leaders - Pfizer and Moderna - to do what they have been reluctant to do - drop their extraordinarily profitable current products and pursue new vaccine approvals
- It is arguable from a medical perspective that they should have already introduced specific anti-Delta vaccines, as the efficacy has waned to 46% and 58% respectively
- All manufacturers are already running tests of existing vaccines against Omicron
- Some have begun Omicron-specific booster development, as well as to explore other solutions
- Even though the Regulators could allow smaller human testing e.g. 800 vs 15,000 vaccine recipients, there are always uncontrollable, unknown factors in a clinical trial, which could put current providers’ $30 Billion Covid vaccine business at risk
- It is unlikely that they will be able to achieve the 94-95% efficacy they reported the first time, as those trials had unusually favorable factors, e.g., U.S. sample only, no new variants, and apparently ‘softer rules’ allowing the exclusion from the calculations of non-symptomatic cases, combined with a political environment wanting a ‘positive’ result
- Given the disappointment with the rapid declines in vaccine effectiveness, and with the greater COVID-19 knowledge today, there could be greater regulatory scrutiny this time, depending on the frequency/severity impacts
- However, If the more dangerous impact scenario emerges from Omicron, regulators could weigh the cost/benefit tradeoffs of human testing vs. in vitro lab testing of new vaccine formulations - as is currently done annually for the flu - this is speculative, but was also suggested by an mRNA CEO
- On the WIV side:
- Experts in the UK have stated that because a WIV vaccine has more parts of the virus for the immune system to learn from it could be more ‘variant-proof’ than the others
- European Union has ordered up to 60 million WIV vaccines from Valneva
- Sinovac has recently re-engaged with the EMA as to a potential European approval and market entry
- Global investor markets have become rattled and volatile, given the news of the Omicron variant
Industry Updates Volume 13Read Now
Living with the Endemic
What Does the Medicine Say?
- November will be the month when the Covid Pandemic officially becomes Endemic, based on the agreement of the United States and Europe to adopt an open skies without a quarantine policy for vaccinated persons.
- This decision is driven more by political and economic considerations, than by medical or epidemiological facts.
- The UK currently has extremely high infection rates (~ 50K per day, and going higher), as do several countries in central and eastern Europe.
- Singapore, which had tightly controlled the pandemic for a long time, has now been placed on the highest category 4 travel warning by the CDC, as infections have surged.
- Israel has asked the U.S. and Europe to treat any traveler who has been vaccinated for more than 6 months, as if they were unvaccinated if they have not received a booster shot, but this request has fallen on deaf ears.
- China, Europe, and North America are all now reaching vaccine plateaus, and India, several other Asian countries, and much of Latin America will also reach this point by Q1 2022.
- There are sizable remaining pockets of unvaccinated in several countries, including the U.S.
- With 6.6 Billion COVID-19 vaccine doses administered worldwide to date, there are still at least 4-5 Billion people that have not been vaccinated at all, or just partially vaccinated.
- The World Health Organization and the Covax facility are again complaining that very few vaccines are available for Africa and a number of other poorer countries as richer countries are buying up all the available supplies for booster shots and to create strategic stockpiles.
- Living with the Endemic is likely to mean booster shots every six to twelve months for the foreseeable future.
What Does the Medicine Say?
- The original strategy of achieving 'herd immunity' has been quietly dropped as the volume of breakthrough infections show the theory to be untenable with respect to Covid.
- National health policies say that vaccination will reduce the risk of a subsequent infection by over 50%, AND, will also reduce the risk of a severe outcome if infected by a further 50%.
- In addition, care of Covid cases has improved, and new therapeutics such as the Merck pill may reduce severe illness by a separate 50%.
- The cumulative effect of all of this is to reduce the risk of death from Covid for people with up to date vaccination by over 90%, so that the disease becomes 'manageable'.
- Merck has now offered to allow free licensing of its Covid therapeutic pill in poorer countries
- It looks like we will be living with an ongoing but much lower death rate from endemic Covid for many years to come.
- The great unknown is whether new variants which are more dangerous than Delta will emerge, or conversely will the virus naturally wane over time.
- Circumstantial evidence continues to suggest that countries which used the broader spectrum WIV vaccines have suffered less in the Covid surge as illustrated in the following graphs:
Source: Our World in Data as at 23rd October 2021
- The FDA and CDC made an important decision to recognize the evidence from research studies that heterologous vaccination (using a different type of vaccine as a booster) is more protective than more of the same vaccine, and has approved this approach.
- Some of the underlying research proving this was conducted by a team including Refana's Chief Vaccine Advisor, Professor Stephane Paul.
- Given the waning efficacy of the original vaccines, we expect a significant number of new products to be introduced during 2022, including formulations by Pfizer-BioNTech and Moderna.
The Business of Vaccines
- The value of Covid vaccine sales in 2021 and 2022 is such that the category is becoming the most valuable drug category of all time.
- Pfizer-BioNTech and Moderna are enjoying profit margins of over 70% on their sales.
- A number of recent business articles have noted that the 2 big 'vaccines winners' were 'outsiders' - the Turkish Muslim husband and wife team who founded BioNTech in Germany, and the Boston based Moderna founded by an Armenian immigrant, and with a French CEO and Israeli Chief Scientist.
- Conversely none of the three major historic vaccine companies Merck, GSK and Sanofi got a vaccine to market. While Johnson and Johnson, and AstraZeneca (licensed from Oxford) did get to market, they have had much less favorable market share and overall economics.
- Pfizer has proven itself as an excellent manufacturing and sales partner to BioNTech, but despite its dramatic revenue and profit surge expected this year and next, this is not reflected in the share price, as Pfizer failed to agree an acquisition or long term strategic deal with BioNTech, which continues to control the underlying technology.
- The situation with the Chinese manufacturers Sinovac and Sinopharm is less transparent but consulting firm Airfinity expects they will each hit $20bn of revenue this year, based on over 2 billion shots delivered in China, and more than a billion overseas. The great unknown however is the pricing deal with the Chinese government.
- For conspiracy theorists, the fact that China has proceeded with a 100% WIV domestic vaccination program that now covers 80% of its population is a Red Flag!
- China had access also to adenovirus vaccines, like AstraZeneca, J&J, and the Russian Sputnik V. Having acquired 6 Million doses and administering them to the Chinese security forces, they suddenly stopped using it without comment. What do the Chinese know that we don't?
- Refana estimates the value of the Covid vaccine market, based on the need to provide boosters, and to protect from new variants, to be worth U.S. $180 Billion from 2023-27.
- Current global volumes of doses administered to date by vaccine type are set out below.
Industry Updates Volume 12Read Now
State of the Pandemic - Still Raging, Even Though Everyone is Getting Tired Of It!
Delta has Quietly Changed Public Policy
- The global pandemic continues to rage, as the worldwide death toll fast approaches 5 Million, and confirmed global Covid infections are now close to a quarter of a Billion.
- Deaths in the United States are almost 700,000, followed by nearly 600,000 in Brazil, and 450,000 officially declared in India (but widely believed to be under-reported).
- The total Covid death rates per Million in the United States and the UK are almost identical (2,098 and 2,090) but far exceeded by Peru and Brazil (6,131 and 2,831).
- Latin America death rates (Mexico, Argentina and Columbia) exceed the U.S./UK death rates, as do several European countries (Italy, Belgium, Czech Republic, Bulgaria, Hungary, Croatia)
- Some countries have notably lower death rates (Canada 738; Israel 848; and Ireland 1,054).
- However, daily new infections have been close to previous peaks as the Delta surge continues.
- The daily death rate is lower than previous results. Global deaths peaked at over 17,000 per day in the January 2021 surge; at 15,800 in the April surge; but peaked at 11,700 in the current surge at the end of August, and have now fallen back to approx 7,000 death/ day
- Of these 7,000 daily deaths globally in late September, up to 2,000 have been in the United States as the Delta variant continues to spread.
- Lower total deaths overall during the latest surge may be a result of global vaccination, where over 6 billion shots have now been given, with 40% of these in China (which now exceeds 80% inoculation, based on reported numbers.)
- In the United States - and other western countries - the vaccination campaign has bifurcated into two different groups:
- Extending vaccination to younger age groups, while also combating the 15-30% of 'hold-outs' who have not been vaccinated.
- Providing 3rd 'booster' shots, as vaccine efficacy - particularly of market leader Pfizer - BionNTech - has waned significantly over 5-8 months, and less effective against Delta.
- The Biden administration is making concerted efforts to increase vaccination rates - using a 'carrot and stick' approach. Compulsory vaccination is required in many workplaces. At the same time, the U.S. and Europe have agreed to re-open the skies for mutual travel without quarantine - but only to the vaccinated - from November.
- The ‘hold-out’ rate in the United States has declined a little, following the Delta surge, but still stands at 25% of eligible adults, who have declined the Covid vaccine.
- In Israel, the hold-out rate of unvaccinated adults has fallen from 23% to 17% following Delta, and the 3rd shot campaign for the rest of the population.
- Overall, the U.S. ranks last of G-7 countries in overall vaccination rates, recently passed by Japan.
- Conversely, certain countries - including Canada and Ireland - exceed 90% vaccination of eligible adults. Ireland has taken first place in the Bloomberg ranking of Covid resilience, while the U.S. fell to 28th place and Israel to 41st.
Delta has Quietly Changed Public Policy
- High rates of breakthrough infections caused by the Delta variant - combined with the waning immunity of current vaccines - has prompted an effective, if unannounced, change in public health policies worldwide.
- Actual infection by Covid has been shown to provide 13 times more protection against reinfection than 2 shots of the Pfizer-BioNTech vaccine.
- The case for vaccinations being made is that it reduces the risk of severe outcomes like hospitalization and death by 80-90% in those infected by Delta, and NOT that it protects directly against infection or transmission.
- Given the high rate of breakthrough infections from Delta, the potential community protection of 'herd immunity' is elusive.
- See attached figure showing vaccination rates of the ‘best’ countries in the world - even they are not good enough.
- McKinsey estimates vaccination rates needed by countries to achieve herd immunity. Ranges from ~100% vaccination in isolated countries like Australia - which have had little natural infection - to < 50% in countries like Brazil.
- A key change in the McKinsey model - they assume that "Natural infection is ~100% effective, lasts long enough to reach herd immunity".
- In the U.S., sharp differences have emerged between the White House, the FDA and the CDC re: policies for further booster shots of existing vaccines, leading to the resignation of two senior FDA vaccine officials.
- Data is not clear whether boosters provide much additional protection to healthy younger adults, but have been recommended for the 65 plus by the FDA, and approved for a wider audience to include younger people with weakened immune systems by the CDC.
- The absence of a vaccine which could directly protect against the Delta variant has become evident in this debate - most officials believe that the pandemic will become endemic, with further new variants arising.
- Albert Bourla, the CEO of Pfizer, has said that he expects that current vaccines may not be protective against new variants which may arise after Delta.
- It is not clear whether issues facing countries which have relied primarily on mRNA vaccines from Pfizer and Moderna (e.g. U.S., UK, Israel) will also apply to countries which have relied primarily on other vaccines, and particularly Whole Inactivated Viral (WIV) vaccines.
- If natural infection with the whole virus has been shown to be 13 times more protective than Pfizer after 6 months, then a vaccine which most closely replicates natural infection (a WIV vaccine) should also provide wider, longer term protection.
- Four important charts showing infections and death rates included below.
What the World Needs Next: Market Opportunity
- Our conclusion is that what is now urgently needed is a WIV vaccine manufactured and regulated to the top western standards, based directly on Delta and other latest variants.
- This would be a meaningful 'booster' for those already inoculated with a Wuhan strain Spike protein vaccine; as well as a much more direct protection for the unvaccinated everywhere.
Graphs courtesy of Our World In Data