Pipeline as percentage of total value and growth As % value of whole company
Contribution of pipeline to future earnings growth
Glaxo
11%
27.0%
AbbVie
11%
18.7%
Novartis
13%
15.7%
Roche
13%
15.4%
Merck
13%
15.0%
Astra
14%
14.0%
Eli-Lilly
20%
10.0%
Novo Nordisk
12%
8.4%
Company
Bristol-Myers Squibb
16%
6.4%
Sanofi
19%
5.3%
Pfizer
16%
0.0%
Source: Berenberg, Shares
has been validated. Government financial support lowered the financial risk and encouraged some drug companies to take more risk on cutting edge technologies and innovative solutions. Good examples are the Pfizer and Moderna Covid-19 vaccines which came about by experimenting with mRNA technologies which until now have never been commercialised. Traditional vaccines infect people with a modified harmless version of the virus so that the bodies’ immune system can recognise the threat. With an mRNA injection the body’s immune cells are told how to recognise the virus so that the body can make antibodies. This means the virus doesn’t need to be grown in the lab, saving valuable time. It also means there is zero chance of accidentally infecting people with the virus. TOO GOOD TO BE TRUE? While it’s generally thought the required safety protocols have been followed, there is a risk that the public might view the speed of approval as a sign that corners were cut or that longer-term effects of taking a vaccine haven’t been given enough consideration. The confusion surrounding the AstraZeneca (AZN)/Oxford University Covid-19 vaccine trial results is a good example of the fine line that big pharma and governments need to tread to keep
the public trust. Making vaccination mandatory is unlikely to be a successful long-term strategy. The announcement from AstraZeneca focused on an average effectiveness of 76% depending on the level of dosage. But it turned out that the higher 90% rate was effective only on patients under the age of 55 and involved a half dose followed by a full dose which wasn’t the originally intended dosage. The efficacy rate is still way more effective than the average flu jab, but this got lost in the debate, leaving some observers questioning the credibility of two of the most respected institutions in the world. In any event AstraZeneca’s chief executive Pascal Soriot has said the company will conduct another trial to confirm the true relationship between dosing pattern and efficacy. One important point to bear in mind is that all the vaccine makers have said they will submit clinical data for peer review, so when all the dust settles, only the most effective vaccines with the best safety data will be on the market. PHARMA TO THE RESCUE In addition to Pfizer and AstraZeneca, other large pharma companies such as GlaxoSmithKline (GSK) and French group Sanofi are also collaborating on a Covid-19 vaccine. Eli Lilly recently signed an agreement with the US government to supply 300,000
“The big pharma groups involved in developing vaccines for Covid-19 have said they don’t intend to make a profit from the pandemic, at least initially”
10 December 2020 | SHARES |
29