How did AstraZeneca lose the vaccine race? –

From the moment it was announced on April 30 2020, the vaccine deal with Oxford was a leap into the unknown for AstraZeneca. In the critical process of R&D, it controlled neither R nor D. The research behind the vaccine had been conducted not by its own scientists, but by the Oxford team. Meanwhile, the development of manufacturing to meet global demand would also be outsourced. “They didn’t have the [manufacturing] footprint,” says analyst Adam Barker at Shore Capital. “So essentially they were a middleman.” Without experience in global rollout of major vaccines, AstraZeneca suddenly found itself in charge of a product – likely to be among the most scrutinised in the history of medicine – that it had neither invented nor was making.

Just how charged this new arena was to be for the company was clear from the very beginning. On April 23, a week before AstraZeneca announced its deal with Oxford, Elisa Granato, a microbiologist at Oxford, became the first volunteer to be injected in the vaccine’s UK trial. Within two days, conspiracists began to report online that she had died. On Sunday April 26 she was forced to make a video. “I’m very much alive,” she said. “Having a cup of tea.”

In the end it was easy to smile and debunk such a simple hoax. But behind the scenes, seeds of two far more serious problems were being planted. As so often in this vaccine story, AstraZeneca was not the exclusive author of its own misfortune. Instead, according to industry insiders, in the complex world of public health campaigns the company was simply beginning to show its innocence. “The big thing in vaccines is the regulation, public and government affairs side of things,” says one senior industry executive with long experience of major vaccine campaigns. “Getting out ahead of problems. Communications are critical. But there was a lot of naivety.”

The first of the two problems was that, from an abundance of caution, early trials in spring and summer last year didn’t recruit enough elderly volunteers. The second was that, while the US and UK placed orders for the eventual vaccine in May, the EU waited until August. Both issues would come back to haunt AstraZeneca.

And yet at the start of the vaccine race, as its first contracts were being signed, AstraZeneca was on top of the world, becoming, in mid-May 2020, the most valuable company in the FTSE 100, worth some £115bn. Its ascent represented a personal triumph for Soriot, whose £15.4m pay packet (also top of the FTSE charts) angered some shareholders. At the time, however, the £90m he had been paid since taking over in 2012 was looking to be good value. Under his leadership, the company had focused on cancer treatments, streamlining and re-energising a business which in 2013 had been a takeover target for Pfizer at £55 a share. Soriot had insisted AstraZeneca could do better on its own. By 2021, with shares at almost £90, he had been proved right. “They’re the best example of a turnaround in productivity for a pharma company I’ve ever seen,” says Barker. Indeed, by 2020 AstraZeneca was no longer the prey, but the hunter, pursuing an extraordinary $39bn takeover of the US biotech group Alexion. Alongside the vaccine, integrating the two companies would become a second mammoth project for Soriot, testing even his work ethic – notorious within the industry.  

November 2020 turned out to be the month the world was waiting for. Having repeatedly been warned not to get our hopes up about Covid vaccines, Pfizer revealed its vaccine was 90 per cent effective at preventing infection, way above expectations. Exactly a week later, Moderna said its vaccine was 94.5 per cent effective. Shares in both companies soared. Then came AstraZeneca’s turn. By comparison, the results were a bit of a disappointment – only 70 per cent effective. But it wasn’t just the headline number that was the problem. One of AstraZeneca’s contracted manufacturers had made a mistake during the trial, and concocted a batch of the vaccine that was only half strength. Oddly, though, they seemed to be better protected against Covid – 90pc – than those on the usual two-dose regime – 62pc. It also turned out that, because of the lack of older volunteers, the higher efficacy was among a group exclusively under 55 years old. Thirdly, the gap between doses was different for different volunteers. 

So while Pfizer and Moderna had clear studies, AstraZeneca’s trial managed to introduce doubt about efficacy in three variables: age; dose strength, and time between doses. In the end it proved to be the last of the three that was crucial – a longer gap boosted the jab’s effectiveness. But at the time, there was confusion. And confusion was to prove the forerunner of scepticism. “When they released their data, many people looked at it and thought it was weaker than Pfizer and Moderna,” says Barker. “They could have communicated that much better.” Unlike its peers, the release of AstraZeneca’s trial results saw its share price dive. 

Soriot later admitted that he “didn’t expect” the criticism that followed the mishandling of the trials. But the hangover seemed to fade, and by the end of the year he was able to bask in the knowledge that his bold decision of eight months before was already bearing fruit. Millions of doses were already being manufactured when, on December 30, Britain’s regulator approved AstraZeneca’s vaccine for use. It had been just 243 days since the company began its collaboration with Oxford.

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