The vaccine business: what can a corona injection cost?

The countdown is running. Several pharmaceutical companies are on the home stretch in the development of a vaccine. They are already being celebrated on the stock exchange for their multi-million dollar deals with states. In the end, does the industry with the corona injection make the big difference?

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, Biotech or Moderna – the small players among the hopefuls – are no longer unknowns. With almost 35 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 from the biotech industry finally have the attention and the financial means 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 20 million euros last year, the company is now worth around seven billion euros. Due to the increased stock market valuation and the high level of investor interest, Curevac can now raise funds very easily and, for example, raise additional funds with a capital increase.

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 the pricing of 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 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's less than what other vaccine manufacturers call 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 enrich themselves with the vaccine. Otherwise, the company bosses can no longer dare to go out into 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 about 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 another reason for this reluctance emerges: "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 startups 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 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 be available. The Commission is only assuming five million units in the initial phase. That is, it would be months before all citizens would be vaccinated.

Even during this time, setbacks cannot be ruled out. "A few years ago, Sanofi marketed a vaccine against dengue fever. It turned out that in some cases the vaccine had no protective effect at all, but rather worsened the disease, because instead of neutralizing immune-enhancing antibodies, the infection was intensified." , Linimeier points out. 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, if you put that in perspective to the amount of people who will be vaccinated with a Covid 19 vaccine. Even with a hypothetical risk of 1: 10,000, very many people would be affected. Therefore, must you can 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 assessment". The managers at Moderna also seem to be critical of this. Some of them appear to have cashed in and sold shares before the vaccine even got approval.