Economy & Politics

The billion dollar spade against Corona

Vaccine developers will definitely get the attention in times of the pandemic. The big names in the industry, Astra Zeneca, Johnson & Johnson and Pfizer, were already known. Curevac, Biontech or Moderna – the small players among the hopefuls – are no longer unknowns. With 36 million Covid-19 infected worldwide and more than a million deaths, steam is being made everywhere.

There are now almost 200 companies working on a corona vaccine. Quite a number of them are stock corporations whose papers are traded on the stock exchange. Investors who jumped on the bandwagon early look forward to a lucrative investment. Just one example: The Tübingen-based company Curevac went on the US tech exchange Nasdaq in August with an issue price of 16 dollars. The stock now costs over $ 40.

Not only investors benefit from the corona hype. The young companies in the biotech industry finally have the attention and financial resources for their studies that they could only dream of for a long time. Given the pandemic, they are generously supported with taxpayers’ money.

In the case of Curevac, the federal government has even bought 17 percent. With sales of less than EUR 20 million last year, the company is now worth around EUR 8 billion. Due to the increased stock market valuation and the great interest of investors, Curevac can now raise funds very easily and, for example, raise further funds with a capital increase.

Curevac share


Course provider: L&S RT

They are developments with seven mile boots. The special thing about it: In this race, even small companies have the chance to conquer the world as a sales market. The hopes are correspondingly high that the cash registers will ring for the manufacturer or those who make the breakthrough.

Is the dream of the corona money rain realistic? When it comes to pricing the vaccine, it is noticeable that the reluctance prevails. The US company Johnson & Johnson has already announced that it will sell its vaccine at cost and not want to make a profit. The drug should be sold – if it is even ready for the market at all – for ten dollars a dose. As things stand, that is less than what other vaccine manufacturers are calling for a price. But also more expensive than the preparation from Astra Zeneca, for example. The British pharmaceutical company only wants to take 2.50 euros per dose.

“From scapegoat to savior”

Even if the price fluctuates, one thing is for sure: “The well-known vaccine manufacturers will not charge high prices,” says the molecular biologist and fund manager of Medical Strategy, Mario Linimeier. The social pressure is too high. “I don’t think any management is so frivolous as to get rich with the vaccine. Otherwise the company bosses can no longer dare to go out on the streets. “

The General Director of the International Federation of Pharmaceutical Manufacturers & Association (IFPMA), Thomas Cueni, had already advocated a waiver in May: It was a matter of delivering an affordable vaccine – not only in the rich industrialized countries, but also in the developing countries.

The IFPMA mainly represents the big companies, not the many small biotech companies. That is why there is another reason for this reluctance: “The pharmaceutical industry has often been in the line of fire because of allegedly excessive drug prices,” says Linimeier. “With the corona vaccine, corporations can now wash themselves perfectly clean, so to speak, from being a scapegoat to a savior.”

Smaller biotech companies cannot keep up with this aggressive pricing. The big competitors have other products on the market and can use them to cross-finance the costs of vaccine development. Small biotech companies don’t have this option. They depend on money coming into the till.

For this reason, Curevac has also declined to offer the vaccine at cost. Just like the Mainz company Biontech, which works with the US company Pfizer to develop vaccines. The latter want $ 19.50 per dose for the first 100 million units. As things stand, only the US company Moderna is asking for more: Depending on the contract, 37 dollars are due here.

In the “valley of death”

Clinical trials are expensive. This is a particularly big challenge for smaller companies. According to the industry, the “valley of death” has to be crossed before the first proof of the functionality of a new drug is provided. Not surprisingly, many start-ups fail precisely in this phase.

But even if the “valley of death” is passed and the vaccine works, there is still a long way to go before it is widely launched. “If we assume optimistic scenarios that there will be an emergency approval at the end of the year, broad approval will probably not follow until the end of 2021,” predicts Linimeier.

According to the permanent vaccination commission of the Robert Koch Institute, Germany alone needs 160 million vaccine doses – probably two syringes for each person. It may take a while for that much vaccine to exist. The Commission is only assuming five million units in the initial phase. That is, it would be months before all citizens would be vaccinated.

Setbacks cannot be ruled out during this period either. “Sanofi marketed a vaccine against dengue fever a few years ago. It turned out that in some cases the vaccine has no protective effect at all, but rather worsens the disease, because immune-boosting antibodies are formed instead of neutralizing antibodies. This increased the infection, ”says Linimeier. The phenomenon is known in vaccine production.

More risks than opportunities

Even the young biotech companies that are hoping for a big hit with their new mRNA technology are not immune to setbacks. “If it is possible to bring such a corona vaccine onto the market, it will be a breakthrough for the entire technology platform,” said the expert. Because it would increase the chances of success for other mRNA preparations in the pipeline.

But here too there can be setbacks in the form of unwanted immune defense reactions. “Even if the risk of side effects is small, considering the number of people who are vaccinated with a Covid-19 vaccine. Even with a hypothetical risk of 1: 10,000, a great many people would be affected. So you have to be very sure, ”warns the molecular biologist and fund manager.

It is correct: Curevac and Biontech received an unexpected boost from the pandemic. But it also has its downside: An analysis of the market value of the most important Covid-19 players has shown that “market capitalization has increased by more than 115 billion US dollars,” says Linimeier.

If you put that in perspective on the sales or profit potential of the vaccine, there is “a certain discrepancy in the evaluation”. The managers at Moderna also seem to be critical of this. Some of them may have cashed in and sold shares before the vaccine even got approval.

The article first appeared on ntv.de.

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