Despite the escalation of new COVID-19 cases, we see hopeful news about the development of effective vaccines. Our friends at Anfield Capital provided us the following helpful summary on the state of vaccine developments:
November saw several key developments in the global fight against the COVID-19 pandemic. With so much information out there, much of it quite technical in nature, we thought it might be useful to try our hand at summarizing the high points in as plain a manner as possible.
According to the New York Times, as of the date of this writing (November 30), researchers are testing 57 vaccines in human clinical trials, while at least 87 preclinical vaccines are under active investigation in animals. Our summary below focuses on what are generally deemed to be the most promising vaccines that have garnered most of the markets’ attention. The four vaccines below are all conducting Phase 3 trials, which is where the vaccines are given to thousands of people in the sample pool and are tested for efficacy and safety. Many of the COVID vaccines will likely go through a Phase 4 trial, which consists of formal, ongoing studies after the vaccine is approved and licensed.
Pfizer, BioNTech (BNT162)
Type: mRNA-based vaccine
Doses / shots: Two, 3-4 weeks apart (WSJ)
Efficacy: Average efficacy of 95%
Status: PFE and BNTX have both filed for emergency use authorization with the respective government agencies. United Airlines has also begun flying doses of the vaccine to position for quick distribution
Moderna (mRNA-1273)
Type: mRNA-based vaccine
Doses / shots: Two, 3-4 weeks apart (WSJ)
Efficacy: Average efficacy of 94.5%
Status: Applied on Monday, November 30 for emergency use authorization with the FDA. According to MRNA CEO Stephane Bancel, the first injections could be administered as soon as December 21 if approval is granted
AstraZeneca, University of Oxford (AZD1222)
Type: Replication-deficient viral vector vaccine
Doses / shots: Two, 3-4 weeks apart (WSJ)
Efficacy: Average efficacy of 70%
Status: After a hiccup in September where a UK-based trial participant experienced a suspected adverse reaction, clinical trials have resumed in the UK (September 12, four days after the initial suspension), the US (October), and various other countries. On Friday, November 27, the UK government took the first step in the approval process by formally referring the vaccine to its medicines regulator for assessment
Johnson & Johnson (JNJ-78436735)
Type: Non-replicating viral vector
Doses / shots: One; but JNJ is also working on a two-dose regimen just in case
Efficacy: Average efficacy TBD
Status: JNJ’s chief scientist said the company expects to seek authorization for its single-shot vaccine candidate by February or earlier, while the company has also started on a two-dose regimen
Distribution – A Partnership Between Governments and Corporations
General consensus is that the vaccine will be distributed to those in the “frontlines” of the COVID fight first. This includes healthcare workers, first responders, and those with multiple comorbidities that tend to face the highest fatality rates.
As reported by Politico on November 30th, the Trump administration has told state governments and officials that they have “ultimate authority for determining who gets vaccinated first.” We believe that in general, state governments will tend to follow the consensus in choosing who gets vaccinated first. We expect that the government will partner with corporate America to deliver the vaccine at record rates. For example, according to the Wall Street Journal, “United Airlines on Friday [11/27] began operating charter flights to position doses of Pfizer Inc.'s Covid-19 vaccine for quick distribution if the shots are approved by regulators, according to people familiar with the matter.” We expect many more of these government-corporate partnerships in the months to come.
Below is a very helpful chart put together by Ariadne Labs showing the different priorities (e.g. healthcare workers, critical risk workers, etc.) and what vaccine dissemination could look like:
Sources: Company Websites, Bloomberg, NYT, WSJ, US CDC, Ariadne Labs
We believe these developments mark the beginning of what we term the “Pre-Vaccine” phase, which has important implications for the US and global economic recovery, and in turn, the behavior of financial markets. We will be discussing these and other themes at our Annual Economic and Investment Forum scheduled for December 10-11.
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