Covid's legacy: a new armoury

It is now a year since the UK was put into a state of national lockdown in an attempt to curb the spread of Covid-19. Although a dismal year for many, one great success story to have emerged from 2020 is the successful development and approval of a dozen vaccines at the time of writing.

Development boom

The global endeavour to create a safe and effective Covid-19 vaccine has begun to bear fruit – at the time of writing 12 vaccines have been authorised in at least one country around the world, while many more remain in development.

According to the World Health Organisation (WHO) there are now more than 230 vaccine candidates which use an array of different methods in an attempt to fight the virus. Historically, developing vaccines takes around 10 years, so to have developed 12 in only a year is an incredible feat.

This has been the fastest vaccine development ever, made possible through collaboration and investment on a scale that has never been seen before, which we discussed in our last vaccine update. A hugely accelerated development timeline – as illustrated below – has been another major factor in reaching vacccine deployment so quickly.

Covid-19 vaccine accelerated development

^{Source: World Health Organisation}

Old school vs New school

The two predominant vaccines being distributed in the UK are those developed by Anglo-Swedish pharmaceutical company AstraZeneca in partnership with Oxford University and the jab produced by German biotechnology company BioNTech in conjunction with American pharmaceutical giant Pfizer. Both vaccines have proven to be effective in protecting against the virus, with recent data released by Public Health England suggesting a single shot of either jab reduced the chance of hospitalisation by more than 80%.

The two vaccines take very different approaches to preventing infection. The AstraZeneca vaccine uses a conventional approach adding the gene for the coronavirus spike protein to another virus called an adenovirus (these are common viruses which typically cause colds or flu-like symptoms), which is then injected into the body. This approach prompts the body to trigger an immune response, helping to prevent subsequent infections.

The Pfizer vaccine takes a differing approach, using Messenger RNA (mRNA), a new method for vaccine creation. The mRNA technology, which was originally developed as a cancer therapy, introduces a messenger RNA sequence that contains the genetic instructions for the vaccinated person’s own cells to produce antigens and generate an immune response. This avoids introducing a dead or weakened form of virus into the body, as is the case with traditional vaccines.

What's the big deal?

The development of this new mRNA technology is an exciting milestone in vaccine development and could become a game-changer in how pharmaceutical companies approach vaccine production in the future. There are a number of benefits to this approach.

The mRNA is made from a DNA template in the lab, which is a much quicker process than that undertaken by traditional vaccines. In the future it could take as little as a week to generate an experimental batch of an mRNA vaccine, compared to between 10 to 15 years for a traditional vaccine.

Furthermore, as mRNA technology synthetically produces DNA it means no actual virus is needed to make a batch of vaccine. Traditional approaches, by contrast, require a large amount of the virus in a weakened form. As the mRNA approach utilises synthetic production methods, it may offer a more flexible approach to tackling future viruses which are rapidly evolving, as well as enabling a faster response in the face of large outbreaks and epidemics. This is surely a benefit when compared to traditional methods, which rely on growing the right strain of a virus and the production of enough virus for millions of doses, which can take many months or years.

However, there are also downsides to mRNA vaccines. The most talked about limiting factor of the Pfizer jab is the need for it to be stored at very low temperatures, as mRNA is far more fragile than DNA. This compares with the AstraZeneca product which can be stored at regular fridge temperature. This has clear implications for distribution and cost of storage of the Pfizer vaccine, making it more difficult to roll out in less developed countries.

Who benefits?

Clearly the emergence of a new type of vaccine that has huge potential to revolutionise future vaccine development is a benefit for society as a whole. While only time will tell whether mRNA really is the future of vaccines, the fact that a new vaccine technology has been brought about from the emergence of Covid can only be described as a positive. Ten years ago, the idea that you could protect people from infections by injecting them with mRNA would “have provoked some puzzled looks” from scientists in vaccine research, according to Adam Finn, professor of Paediatrics at Bristol Children’s Vaccine Centre.

But what does it mean for the creators of these vaccines? While some vaccine makers, such as AstraZeneca, are pricing their vaccines at cost, others such as Pfizer and Moderna (a small US biotech firm which has been working on an RNA vaccine for years) are charging far more. This could mean we see bumper profits for some pharma names, while others do not profit.

More significantly, the pandemic has ushered in a new wave of enthusiasm for medical innovation, with expectations of increased R&D spending by big pharmaceutical companies. We continue to view healthcare as an exciting investment opportunity.

Vaccine makers are charging different prices 

Price per dose ($USD)

^{Source: BBC}

The securities referred to in this article are for illustrative purposes and are not to be considered a recommendation to buy or sell. Past performance is not a guide to future performance. The value of an investment and the income from it may go down as well as up and investors may not get back the amount originally invested.