Oh. My. God. I have used the quote from John Hillerman's great character, Jonathan Quayle Higgins, on Magnum P.I. in my RM column a few times lately, but yesterday I think uttered the OMG of all OMGs. It came after I read this excellent, and thoroughly researched (with six authors listed on the byline) Reuters article that noted the discovery of 29 million doses of AstraZeneca's (AZN) COVID-19 vaccine in a facility owned by Catalent in Anagni, Italy. Those doses were found in a warehouse by Italian security services, who seem to have been tipped off by the EU. I can only imagine that it was a Fellini-esque scene with plenty of shouting and hand-gesturing, but it is just mind boggling that these drugs are in a warehouse and not en route to/already in deserving people's arms.
The EU has been markedly behind the U.S. and other nations, especially Israel, in vaccination per capita. The Reuters article noted that only 16 million of the "stranded" doses were bound for the EU, with 13 million earmarked for the WHO'S COVAX program for poorer countries. But what really happened here? Was AZN really "stockpiling" a massive amount of doses in a facility owned by its contract manufacturer, Catalent? The AZN dose is given in a two-shot regimen, so presumably there are 14.5 million people around the world who COULD have been vaccinated, but have not been yet, as those doses were squirreled away.
But by whom? And does this mean AstraZeneca now holds the coveted title of Worst Company in the World? No, of course not. The AstraZeneca affair exposes the seedy underbelly of drug manufacturing, and the COVID-19 vaccine is certainly a drug.
There is a web of contracting and subcontracting that goes into vaccine manufacture of which you are most likely unaware. That supply chain is twisted even further when the issue of vaccine nationalism is introduced. Like it or not, it exists. Countries like Russia and China have no such issues as Sinovac, Sinopharm, and Sputnik V -- which is controlled by Russia's sovereign wealth fund, RDIF -- are used as national champions for the vaccines first, with PR-friendly exports and licensing agreements coming later. But the EU is ruled by a (sort of) free market, and thus there is no way for countries to compel companies to "do the right thing" but there are barriers to vaccine export that are frankly quite scary for me as a former UK resident. The UK is no longer part of the EU, of course.
The EU and UK did issue a joint statement yesterday promising cooperation on vaccine distribution, as the tensions over access to the vaccine within Europe are rising. AstraZeneca does not appear to manufacture any of its COVID-19 doses in the UK. But that's the point. AstraZeneca doesn't make any of its COVID-19 vaccines, anywhere.
In addition to U.S.-based Catalent, the Reuters article mentions U.S.-based Thermo Fisher Scientific (TMO) and Dutch-based Halix as the three manufacturers of AZN's anti-COVID jabs. The WHO has also announced that AZN has licensed the technology to the Serum Institute of India for further broad-scale manufacturing.
That's the weird, wacky world of global pharma. AZN is (rightly) taking fire based on the inclusion of old data in a report issued Monday. That report was corrected Wednesday and the efficacy of AZN's COVID-19 vaccine revised downward to 76% from the previously reported 79%. AZN's vaccine has also been plagued by reports of blood-clots exhibited in patients. Don't forget, though, that those patients were given an "AstraZeneca vaccine" that AZN didn't develop -- the scientists at Oxford University in the UK get most of the credit there -- doesn't manufacture, and really only distributes, although the Italian authorities are not even happy with the way they are doing that. Where is AstraZeneca's value in the supply chain? Frankly, I don't see it.
That's not to say I am anti-science or anti-vax. I am just anti-value destruction and human suffering, and AstraZeneca seems to be producing more than its fair share of both lately.
When it comes to drugs of the future I stick to the science and buy stock in the scientists. Arcturus Therapeutics (ARCT) is a name I have mentioned in prior RM columns. This plucky little bunch out of San Diego has developed its own COVID-19 vaccine candidate, currently in Phase 3 trials in Singapore and the U.S. Catalent will manufacture Arcturus' vaccine, as it does for so many other players, and governments will handle the distribution. But, as I mentioned above, I believe that is the least value-added part of the chain, and that is also not scalable.
The genie is out of the bottle with mRNA technology. Messenger RNA science will be harnessed to fight so many conditions other than just COVID-19 and, I am convinced, science will win in the long-term. In the short term just be prepared for more stories of pharma titans fudging test results and hoarding vaccines, and more countries practicing vaccine nationalism. It's ugly and it certainly makes me want to avoid AZN stock. I have.
