Usually, hindsight is necessary to identify the moment a new technology is born. When Steve Jobs presented the first iPhone in January 2007, many experts just shook their heads. The device, they said, was unreliable and unnecessary, particularly in comparison with the time-tested Nokia mobile phones. Apple, they said, had no experience producing mobile phones, and it would never stand the test of time.
Many governments around the world were similarly suspicious last fall when a brand-new vaccine technology appeared, seemingly out of nowhere: mRNA, a new approach that sounded a lot like science fiction and was being presented by a handful of small biotechnology companies that few had ever heard of. Many in the European Union were particularly skeptical of the technology – and doubtful that inexperienced companies would be able to produce the billions of doses necessary.
It would be better, many thought, to rely on large companies using tried-and-true technologies – vector vaccines, for example, from producers like AstraZeneca and Johnson & Johnson. The competition between the different technologies, many thought, should involve larger companies producing vaccines using reliable, time-tested technologies while the smaller, high-tech startups could go for the unreliable moonshot.
But in recent weeks, it has rapidly and surprisingly clear who won the race: the biotech newcomers. Before long, it now seems clear, mRNA technology will become the dominating approach to vaccine production around the world. The mRNA-based vaccines have proven more effective, simpler and safer.
Vector-vaccine producers, by contrast, have slipped up one after the other. AstraZeneca is able to deliver far fewer doses than originally promised, and following a series of mishaps and reports of rare-but-dangerous side-effects, it is widely seen as a second-tier product. Johnson & Johnson has run into production issues. The vaccine produced by French multinational Sanofi fell on its face in clinical trials.
The EU recently announced that it would be focusing its effort on mRNA vaccines starting in 2022 and has ordered another 1.8 billion doses from BioNTech. Furthermore, in a moment of rare forthrightness, the Chinese government said that the vaccines developed in the country, based on traditional technologies, weren't good enough. Chinese vaccines "don't have very high rates of protection," said Gao Fu, head of the Chinese Centers for Disease Control and Prevention. "Everyone should consider the benefits mRNA vaccines can bring for humanity," he added. Other countries, including the United States and Japan, are also planning to shift their focus partly or entirely to mRNA vaccines.
Rarely has a virtually unknown technology proven its worth so quickly. "Even I didn't expect this to happen so clearly and at this speed," says BioNTech CEO Uğur Şahin. The company is expecting to accumulate revenues of 9.8 billion euros this year, more than twice what it projected as recently as 2020. Analysts are predicting global vaccine earnings of around $100 billion or more per year.
A New, Multi-Billion-Dollar Industry?
It is a vast market, and a promising one for three producers in particular: In addition to the U.S. company Moderna, mRNA vaccines are only produced by the two German companies BioNTech and CureVac. And COVID-19 is not the only malady the new technology can treat. Work is underway on mRNA approaches to the flu, AIDS, cancer and numerous other illnesses.
Are we seeing the growth of a new, multibillion-dollar industry developing before our very eyes, led, for once, by Germany? After years in which the German biotech and pharmaceutical industry played but a supporting role, it is a rather surprising development for German companies to be at the heart of efforts to emerge from this pandemic. Berlin and Brussels are also both hoping that the biotech industry will have a significant Made-in-Germany component in coming years.
And its not about the coronavirus, but about mRNA technology as a whole. Indeed, that partly explains the shock felt throughout the industry when the U.S. announced last Wednesday that it was in favor of temporarily suspending patent protection rights for newly developed COVID-19 vaccines. It was first and foremost a political move – and a controversial one when it comes to its potential benefits for fighting the pandemic.
Stock prices of the companies that may be affected dropped immediately and the pharmaceutical and biotech industries reacted with disgust. Who, they wonder, will continue investing in risky and capital-intensive research if it's not even clear that such investments will prove profitable in the end? If the result of one's own work will suddenly be made free to all?
There is a lot at stake for Europe. The EU is concerned that it may lose its hard-won advantage in the technology as a whole. What will happen, after all, if the technology ultimately ends up in the hands of Russian or Chinese companies?
From the perspective of the European Commission, it is clear who would profit most from a rapid suspension of patent protections: China. Officials in Brussels believe that the Chinese pharmaceutical industry would benefit immensely if the advantages enjoyed by European companies in mRNA technology were to be sacrificed. "Party leadership in Beijing is of course celebrating," says one official.
As such, at the upcoming Global Health Summit later this month in Rome, the EU isn't likely to quickly back down from its position, say officials in Brussels. Concessions on intellectual property will only be forthcoming, they say, if the U.S. is prepared to compromise on the export of materials necessary in vaccine production or in the release of vaccine supplies to other parts of the world. The U.S., after all, stood in the way of equitable international vaccine acquisition by pursuing a course of unveiled nationalism. As such, Biden's decision to support the suspension of patent protections is seen in Brussels as a blatant double standard.
The German government is also wary of suspending patents. "The protection of intellectual property is the wellspring of innovation and must remain so in the future," a German government spokeswoman said. Chancellor Angela Merkel spoke with Şahin last Thursday about the issue.
Two questions must thus be addressed: How can the world best be supplied with sufficient quantities of coronavirus vaccine? And, how can Europe protect its current advantage in a future technology that looks set to drastically change the pharmaceutical industry?
It is lucky for the world – and for the small, Mainz-based company BioNTech – that Uğur Şahin has a thing for worst-case scenarios. When Germans were celebrating Carnival at the very beginning of 2020 and enjoying their ski vacations in Ischgl, Austria, the BioNTech CEO shifted the focus of his company entirely to the development of a coronavirus vaccine.
When the EU was still thinking about how much vaccine it should order last summer and happy Germans were sitting in the beer gardens thinking the worst would soon be over, Şahin bought a new factory that could produce up to a billion doses per year. The first talks with pharmaceutical company Novartis aimed at buying an entire factory along with its specialist personnel took place in May 2020.
That factory, located in Marburg, Germany, went online several weeks ago, and it looks like it will be able to save a lot more than just this coming summer. Most experts now believe that COVID-19 will be with us for at least another decade, initially with seasonal outbreaks and then as a seasonal virus like the flu.
That means that we won't just have to be vaccinated now, but over and over again. Demand will remain high for the foreseeable future. Soon, the vaccination of teenagers and children will begin, on top of regular booster shots that everyone will have to receive. By 2030, experts believe there will be a global need for up to 10 billion doses.
Şahin wants to ensure that poorer countries can also be supplied in the long term. "Industrialized countries must begin to understand that helping out once won't be enough." That means that governments, producers and organizations will have to help poorer countries, he says, and BioNTech is making its vaccine available to such countries at prices that are not aimed at making a profit.
He does not believe that suspending intellectual property protections is a solution. "Patents are not the limiting factor when it comes to producing or supplying our vaccine," he says, adding that a temporary suspension of patents would not increase global production and supplies in the near- or medium-term. The eye of the needle, he says, isn't the production formula, but the supply of raw materials, the number of factories and the efficiency of delivery networks.
BioNTech is working on further expanding its production capacities. Currently, the company and its American partner Pfizer are producing vaccine at six sites, located in the U.S. and Europe. The company would now like to enlarge its own production capabilities in Europe and start in Asia.
In late April, Şahin flew to Shanghai. Although China has developed several of its own vaccines, BioNTech found a partner in China in March and began carrying out clinical studies there. "The approval process is almost complete and assessment by the Chinese authorities is underway," Şahin says. He adds that talks with Chinese authorities and partners have been promising. "I have confidence that our vaccine is welcome there and can make a difference," Şahin says. BioNTech believes that it may be able to deliver up to 100 million doses to China by the end of the year.
In recent months, though, the company has primarily concentrated on expanding its production network in Germany. In Hanau, the chemical company Evonik set up a production site for urgently needed lipids, a primary ingredient in mRNA vaccines, in just eight weeks. Initially, the factory was supposed to be finished sometime this summer.
The fight against the pandemic has motivated many suppliers to increase their rates of production. But economic incentives have proven even more effective. The pharmaceutical and chemical industries have realized that COVID-19 vaccines will be a reliable revenue stream for some time to come and that investing in the conversion or new construction of factories makes good business sense. "In Europe, an entire industry, including suppliers, is developing," Şahin says.
Particularly since the coronavirus isn't the company's only focus. "We want to expand the technology, and in addition to cancer vaccine candidates, we have projects underway on HIV, tuberculosis and flu vaccines," the BioNTech CEO says. "And we are receiving a large number of new inquiries." The development of a malaria vaccine could, for example, become an additional focus.
That is what makes the U.S. government's plan to suspend patent protections so dangerous for the company. The COVID vaccine is rooted in a huge amount of basic research conducted by BioNTech, which is also being used in new cancer medications – and which would also be disclosed were patents to be lifted.
Still, despite the patent debate, Şahin is confident that BioNTech will be able to maintain its advantage. Even before the outbreak of the pandemic, the company had begun preparing to mass produce its cancer medication.
The mass production of sensitive pharmaceutical products like vaccines is extremely complicated – as is currently on full display at an industrial park in Baltimore. The U.S. firm Emergent BioSolutions, which has a production site there in a gray factory building, was supposed to produce large quantities of vaccine for both AstraZeneca and Johnson & Johnson – up to a billion doses by the end of the year.
The Challenges of Vaccine Production
Now, though, the factory has been shut down. AstraZeneca is no longer allowed to produce its vaccine at the site, with the U.S. government having banned it. And the production of the Johnson & Johnson vaccine at the site has been suspended for the foreseeable future. Some 15 million doses had to be destroyed. Emergent BioSolutions staff had accidentally contaminated the vaccine with traces of the AstraZeneca vaccine.
Johnson & Johnson is a giant in the industry, and not just in cosmetics and hygiene products. The New Jersey-based company is also on par with such pharma-giants as Roche, Novartis, Pfizer and Sanofi in the pharmaceuticals industry.
AstraZeneca has found itself beset by similar problems, despite being among the global leaders and possessing decades of experience in the production of pharmaceutical products. AstraZeneca promised the EU 120 million doses of its vaccine, called Vaxzevria, in the first three months of the year – but was only able to deliver 30 million doses. For the second quarter, the company promised 180 million doses, but will only be able to provide 70 million – if it can even reach that total.
The production shortfalls are apparently the result of serious manufacturing problems. That, at least, would seem to be the message of EU documents seen by the Belgian magazine Knack and the website politico.com. The documents indicate that in January and February, a factory in the Netherlands belonging to Halix, which had been contracted by AstraZeneca to produce the vaccine, ran into major difficulties. A factory in Britain likewise encountered hurdles in ramping up to full-scale production.
"Scaling up is difficult for a new product," says pharmaceuticals expert Wilbert Bannenberg from the Netherlands-based Pharmaceuticals Accountability Foundation, which focuses on equal access to life-saving medications. "AstraZeneca didn't have much experience with vaccines. They apparently overestimated what they would be able to achieve."
The production of a vector vaccine requires hundreds of constituent parts. Even small variances – with a raw material being used, for example – can render the final product useless. As such, production experts doubt that suspending patents would increase vaccine supply on the short term. Even if you are holding the instruction manual in your hands, producing a vaccine is extremely complex.
High above the southern German city of Tübingen, the lights in many windows of a steel-and-glass structure are on the whole night through these days. This is where the biotech firm CureVac is located, and researchers there are in the final stages. In two, maybe three weeks, they will finally know whether and how well their vaccine works. The results of their global study, involving more than 40,000 trial participants, are almost complete. Preliminary data was encouraging, and CureVac has been conducting research on the mRNA technology longer than the others. For 20 years.
Moderna and BioNTech were faster anyway. For a time, it even looked as though the Tübingen-based company was going to be completely overshadowed by the others. But the problems that large companies like AstraZeneca and Johnson & Johnson have encountered, combined with the hype surrounding mRNA technology, have given CureVac new life.
"Our situation would look quite a bit different if we had had a strong partner on board by last summer," says Franz-Werner Haas, the CEO of CureVac. The U.S. company Moderna received billions of dollars in state support at the beginning of the pandemic, while BioNTech was the beneficiary of a huge investment from Pfizer, stemming from their pre-pandemic cooperation on other projects.
"It All Took Time"
CureVac wasn't quite as lucky. "To finance our study and develop our supply chains for production, we first had to complete a round of financing," says Haas. And then the company went public to acquire more money. "It all took time." The German state invested 300 million euros in the company, but by then, it was difficult to catch up.
Moderna and BioNTech used their capital mostly to reserve raw materials and production capacity. The American company, for example, secured an entire production facility belonging to the Swiss pharmaceutical company Lonza.
Absent comparable financial leverage, CureVac had a harder time finding suppliers and partners willing to turn over entire factories to vaccine production. Only in recent months has the company been able to assemble a group of partners including such giants as GlaxoSmithKline and Novartis. With their help, the company is planning on being able to supply 300 million doses this year.
"We would like to produce a lot more than that," says Haas. But there is a long lead time for many of the ingredients, he says, and suppliers don't have the required amounts in stock. "There is serious global competition for these resources."
There is particularly a shortage of raw materials produced in the U.S., like lipids. "Through the Defense Production Act, we are simply unable to get certain products out of the U.S.," Haas says. CureVac has little understanding for an America which, on the one hand, is hording both vaccine doses and raw materials necessary for vaccine production, while on the other hand, it is demanding that patent protections be suspended in order to help supply the rest of the world with vaccine.
As a latecomer to the vaccine party, CureVac would be especially disadvantaged by patent suspensions. If other pharmaceutical giants gained access to CureVac's vaccine blueprint, they would be in a promising position to quickly catch up. Sanofi, Roche and Chinese companies have already started their own mRNA research – research which would get a huge boost through patent suspensions.
Learning from the Pandemic
Were that to take place, what would become of CureVac's own production facilities which, similar to BioNTech's factory in Marburg, are set to produce around a billion vaccine doses per year? The company is currently converting its factory in Wuppertal, Germany, for the production of mRNA vaccines.
The company has also agreed on a deal with GlaxoSmithKline to quickly introduce vaccines against other infectious diseases. Together with Tesla, they are developing a compact, mobile mRNA factory that can be flown to regions experiencing viral outbreaks.
To avoid putting all that at risk, the CureVac CEO sees only one solution: "Europe has to be self-sufficient," he says. By way of licenses or technology transfer, all of the necessary raw materials and components must be produced in the EU, he says. "It's not about nationalism, but about establishing a certain degree of independence and ensuring that European companies can also profit from this new technology," agrees BioNTech CEO Şahin.
The German government has recognized the problem. It is speaking with pharmaceutical and chemical companies like Evonik, BASF, Merck and CordenPharma to ensure the production of vital special chemical products like lipids. New factories are to be supported both with financing and logistics.
In addition, Berlin is currently negotiating with all three mRNA producers about establishing stores so they always have enough supplies on hand to rapidly supply the entire country, independent of global demand. Moderna may also build its own factory in Germany for that reason. In return, Germany would provide either direct investment or purchasing guarantees.
It appears, in other words, that Germany's political leaders have drawn a few useful conclusions from the pandemic after all.