DGAP-Media / 2021-06-23 / 07:00
By Alain Gilbert, Venture Partner, Sectoral Asset Management
Now that millions of people have received one or two shots of vaccine, we tend to forget that such astounding vaccine
efficacy, distributed via an incredible supply chain around the world, was achieved in less than 12 months.
There is some legitimacy in considering that Covid-vaccine intellectual properties may belong to humanity. After all,
several governments, led by the US, spent billions of dollars in either funding some of these companies and/or
preordering at risk, in order to pursue parallel-path development and large-scale manufacturing, also at risk. The
common belief is that, by waiving the patent ownership, Covid vac- cines could be available more quickly in poor
countries at lower cost, that pharma companies should make no profit on this product, and finally, that solidarity
should prevail for the benefit of mankind.
The above rhetoric, unfortunately, forgets one key parameter in the whole equation: without private corporate
initiatives, financed by shareholders' money expecting a return, extraordinary initiatives taken by entrepreneurs, huge
at-risk investment in manufacturing long before Covid-19 popped up, these vaccines would certainly not be available
today.
Indeed, few pharma companies have been working on mRNA for many years, prior to the current crisis, and spent hundreds
of millions in shareholders' money to develop this technology. This is clearly the case for Moderna and BioNtech, which
were ready to switch some of their internal programs to Covid vaccines almost over- night, back in late December 2019.
This was done expeditiously, at risk for them, and before government funding. Without these prior shareholder
investments, we would not enjoy today hundreds of millions of vaccinated people around the world.
The immediate impact of a patent waiver for Covid-vaccines is likely to be mitigated by several factors. Beyond the
patent itself, vaccine companies have developed an internal know-how that is key for successful manufacturing. The
leading Covid- vaccine makers publicly have already said that they refuse to share that proprietary information in a
case of patent waiver. In addition, the disruption of the supply chain is likely to cause manufacturing delays for the
vaccine originator.
The solution is rather to entice existing vaccine manufacturers to scale up already approved facilities, combined with
government direction of portions of these productions to developing countries at an affordable price. One example,
although not well executed so far, is the deal AstraZeneca signed with the Serum Institute of India (ISS) to gain
rights to manufacture locally in India, a lower-cost Covid vaccine for developing countries, including India, paying
token royalties, under license agreement (1).
Intellectual property is the backbone of the pharma industry. It must stay in order to provide certainty to investors
that fair returns will be made to their investments. We are confident that objectives laid out by governments to make
health products available to the world's poorest countries can be achieved without impacting the patent system.
(1) AstraZeneca (Jan 6 2021) https://www.astrazeneca.com/media-centre/press -releases/2021/
serum-institute-of-india-obtains-emergency-use-authorisation- in-india-for-astrazenecas-covid-19-vaccine.html
About Sectoral Asset Management
Founded in 2000, the Sectoral Asset Management group is one of industry-leading specialists, exclusively focused on
managing global healthcare portfolios. 100% employee-owned with offices in Montreal, Geneva and Hong Kong. Clients
include leading global pension plans, private banks and family offices. In addition, they have long-standing
sub-advisory relationships for institutional investors in Europe and Asia. More on www.sectoral.com
For more information
Markus Baumgartner, Partner b-public AG
E-Mail mba@b-public.ch, Mobile +41 79 707 89 21
End of Media Release
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Issuer: Sectoral Asset Management
Key word(s): Health
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