The triumph of the Oxford-AstraZeneca vaccine

IN A SOLEMN pre-recorded address, Boris Johnson warned Britons that a “tidal wave” of Omicron was on its way, and that the best chance of escape lay in booster vaccines. All adults, the prime minister announced on December 12th, would be offered one by the end of 2021. Yet their choice is to be more limited than in the last vaccination push, with Moderna and Pfizer leading the way. Nearly a year after it was first approved, Britain’s flagship Oxford-AstraZeneca jab will be rarely used.

It is the latest indignity for a vaccine that is both a national symbol—praised by royalty, hawked around the world by the prime minister, made by the country’s most famous university and biggest listed company—and a source of angst. Astra Zeneca has taken flak for data-presentation issues, delayed deliveries and rare adverse events. The share prices of Moderna and Pfizer have soared since covid-19 struck; AstraZeneca’s is pretty much back where it started (see chart 1).

Nor, to the bemusement of many involved, has the company won a great public-relations victory. On some measures, it manufactures the most successful covid vaccine there is. According to Airfinity, a data firm, 2.2bn doses have been delivered, compared with 2bn by Pfizer and 0.5bn by Moderna (see chart 2). Because rich countries increasingly use other jabs, and poor countries mostly use their supply for initial doses rather than for boosters, Astra Zeneca’s vaccine is almost certain to have saved more lives than any other.

Yet it was always unlikely to be a big money-spinner. Ministers were happy for it to be sold at a small profit; the University of Oxford, which came up with the vaccine, was not, both for humanitarian reasons and to avoid being “seen to be cashing in on what was inevitably going to be an enormous amount of human suffering”, says Sir John Bell, Regius professor of medicine at the university. A dose sells at less than $4, compared with more than $20 for Pfizer. “Do [AstraZeneca bosses] look at Pfizer’s [profit and loss] and say, ‘Oh, shit, how did that happen?’ You know, they might,” says Sir John. But it was agreed to be the right thing to do, he adds.

AstraZeneca’s vaccine has struggled for market share in the rich world. Relations with America’s Food and Drug Administration (FDA) soured after the firm failed to notify the regulator about a possible adverse event in a trial elsewhere; the FDA has still not approved the vaccine. After AstraZeneca failed to meet the European Union’s delivery targets, national leaders criticised it and the commission placed an enormous order with Pfizer. “The truth is AstraZeneca had signed an exclusivity deal with us and a best-efforts deal with the European Union,” says Matt Hancock, Britain’s health secretary at the time.

The vaccine, which uses an adenoviral vector, has proved less effective than its mRNA rivals at stopping infection, further reducing demand in the rich world, and is perhaps marginally less effective at preventing death. Soon after it became available, evidence emerged that in rare cases it caused blood clots (as does Johnson & Johnson’s vaccine, another adenoviral-vector jab). This helped persuade the JCVI, an expert body, to recommend using other vaccines in Britain’s booster round. Sir Menelas Pangalos, AstraZeneca’s head of research, says the firm hopes to tweak the recipe to avoid the issue.

But, he adds, there is “little to no” evidence of such adverse events outside the West: “It may be driven by genetics, it may be driven by overreporting, who knows?” Indeed, AstraZeneca’s vaccine is increasingly used elsewhere. Since production surged in September, the countries with the most doses are India (which banned the export of vaccines made there), Brazil and Mexico. Covax, which distributes jabs to poor countries, is another beneficiary. The vaccine is “starting to hit places like Malaysia, Nepal, Vietnam and Thailand, and there’s a ton of people in these countries”, notes Sir John.

The surge of deliveries in the second half of 2021 is the flipside of AstraZeneca’s struggles in the first. The firm worked with partners to establish 25 manufacturing facilities in 15 countries. Its vaccines are made to a formula detailing just about everything that can be controlled in a production facility. At first the firm’s scientists were too optimistic about how quickly output yields would rise, but reality has since caught up. India’s Serum Institute illustrates the scale of the growth. In January it made fewer than 60m doses; by November it had hit 250m.

One question is whether there will be another inversion in 2022, with demand failing to meet potential output. In November AstraZeneca said it would start to make a profit on doses, and had signed deals on that basis for 2022, with prices on a sliding scale depending on the wealth of the purchaser (the vaccine will remain available to poor countries at cost, and even in richer ones the firm will still charge less than its rivals). Its two main selling points are cheapness and the logistical advantage that doses do not need to be kept very cold. AstraZeneca has established a new internal unit for its vaccines, as well as its promising antibody therapy, which was approved by America’s FDA on December 8th. This can prevent covid in people who do not respond to vaccines, including the immune-suppressed.

Forecasting demand has been made difficult by Omicron, against which two doses of AstraZeneca appear to offer scant protection from infection and reduced protection from hospitalisation. If vaccines need to be retooled, the process will take a bit longer than for mRNA jabs. Even if demand outside the rich world remains high, analysts do not expect the vaccine to contribute much to AstraZeneca’s bottom line, especially when compared with the firm’s strengths in oncology and cardiovascular disease. “When I think about the stock, I don’t even think about the vaccine as a driver,” says Gareth Powell of Polar Capital, an investor in the firm.

Pascal Soriot, AstraZeneca’s boss, has always insisted the decision to make the vaccine was fundamentally altruistic rather than commercial, saying that his children would have killed him if he did not take the chance. Given the number of storms his firm has had to weather, and the attention the vaccine has absorbed, shareholders may not be entirely grateful for the gamble. Everyone else should be. ■

An early version of this article was published online on December 15th 2021