The article below is from our BRIEFINGS newsletter of 25 November 2020
With one or more COVID-19 vaccines on the horizon, investors are looking ahead to the manufacturing and distribution of the vaccine. During a recent daily Goldman Sachs Asset Management (GSAM) Forum event, Dr. John Grabenstein, president of consulting service Vaccine Dynamics SP and former Global Executive Director of Medical Affairs for Merck Vaccines, discussed the logistics of a vaccine rollout with Gurpreet Gill, a macro strategist within GSAM’s Fixed Income team.
Gurpreet Gill: Dr. Grabenstein, can you start by sharing your thoughts on the recent vaccine efficacy results and what they mean for COVID-19 vaccine discovery?
Dr. John Grabenstein: While I would caution that the efficacy findings are still interim results, they are certainly good news as they suggest we have correctly identified the spike protein as the Achilles’ heel of the virus—and that bodes well across all vaccine technologies. It is rare to observe adverse events beyond 42 days after vaccination and so the coming months will provide more clarity on vaccine safety. We only need one successful vaccine—though more than one is helpful—but what will be crucial is obtaining sufficient doses to be able to cover the global population of more than 7.8 billion people, especially given that some of the vaccine candidates require two doses.
Gurpreet Gill: Will pharmaceutical companies and governments achieve the manufacturing and distribution undertaking ahead of them?
Dr. John Grabenstein: This is uncharted territory—we have never tried to vaccinate the whole world at once before. Smallpox is the closest historical parallel but that was a 10-year sustained effort. That said, there are modern-day precedents for mass vaccinations. In the US, for example, we administer 160 million to 180 million doses of influenza vaccine in a span of three to four months, year after year. With COVID-19, vaccine developers have been working on development, manufacturing and logistics concurrently so they can move quickly if their vaccines get the regulatory green light. As part of that process, they’ve been focused on identifying potential bottlenecks.
Gurpreet Gill: What are some of the potential challenges and bottlenecks?
Dr. John Grabenstein: There is an unprecedented requirement for cooperation, coordination, synchronization and integration to deliver the vaccine to every city, town or village. Consider this: There is no master database bringing together every healthcare provider, medical equipment warehouse, vaccine storage place and transit node. That said, there are efforts underway to solve the logistical challenges. In the US, for example, the Department of Defense is helping the Centers for Disease Control allocate and distribute COVID-19 vaccines by leveraging the DOD’s military planning and logistics technology to integrate various data into one platform.
Another challenge is that vaccines have to be distributed under controlled conditions, with some requiring ultra-cold temperatures. It is doable but it requires meticulous planning and monitoring. For example, dry ice—which is required to maintain the cold chain during transport of some vaccines—can become CO2 gas in airfreight unless stored appropriately. That said, these issues are controllable and vaccines can be transported this way if airlines are able to monitor this precious cargo with suitable equipment while in flight.
It’s worth noting that Merck’s Ebola vaccine faced similar challenges as it had to be stored at -80 degrees Celsius. That vaccine was transported using Arktek containers—a high-tech insulated cylinder that can maintain cold temperatures for up to a week at a time without an external power source—during the 2014-16 Ebola outbreak in Western Africa and more recently during outbreaks in the Democratic Republic of Congo. As a result of this technology, that Ebola vaccine could be distributed to austere rural regions during armed conflict. While the scale and reach of that vaccination program was not as broad as what will be required for a COVID-19 vaccine, its success creates room for optimism.
Gurpreet Gill: Will the location of vaccine manufacturing influence vaccine distribution?
Dr. John Grabenstein: In order to produce billions of doses, vaccine developers have partnered with manufacturers around the world. There are manufacturing plants in the US, Europe and the UK, but also across developing countries including Brazil, Russia and India. Many advanced countries have secured supply commitments that do not depend on manufacturing location. For developing countries, the COVAX facility—a global procurement mechanism—seeks to ensure equitable vaccine distribution.
Gurpreet Gill: Finally, Dr. Grabenstein, when do you think a vaccine will be widely available and how willing do you think the broader public will be to receive it?
Dr. John Grabenstein: Once vaccine developers apply for Emergency Use Authorization (EUA) for vaccination of at-risk individuals and essential workers—which we’ll likely see in November or December—the US FDA will require perhaps 2 or 3 weeks to review the application before it goes to the CDC for implementation. The European Union has a pathway similar to EUA called Conditional Marketing Authorisation. Given this is new territory, there is currently some debate over which U.S. population groups would be prioritized in an EUA approval. At the earliest, I would expect first vaccinations for identified at-risk groups in the US from mid-December. Assuming a significant supply of vaccines is available by late spring or early summer of next year, a large portion of the US population could be vaccinated by the end of 2021. A similar timeline seems plausible for other major economies such as the Euro area and the UK. But of course, a final and critical step in this progress is vaccine uptake which will depend on vaccine safety and efficacy—data on which is still incoming—as well as trust in the licensure process.