IBEF: November 16, 2020
Serum Institute of India is ramping up production of AstraZeneca's Covid-19 shot, aiming to have 100 million doses ready by December 2020 for an inoculation drive that could begin across India that same month. Serum Institute has so far made 40 million doses of AstraZeneca’s vaccine in the past two months and aims to start manufacturing Novavax’s contender soon.
In a recent interview, Serum Institute of India’s CEO Adar Poonawalla has emphasised that it will take until 2024 to vaccinate the entire world and two years to see a real reduction in infections, due to affordability and manufacturing hurdles. Mr Poonawalla also discussed about AstraZeneca having a significant edge over a rival candidate from Pfizer and BioNTech SE, indicating it was more than 90% effective in stopping Covid-19 infections.
Other challenge that he highlighted was that of expensive cold-chain infrastructure needed to transport and store the vaccine at -70 degrees Celsius. Mr. Poonawalla said it was "just impossible" for most of the world to use at scale, compared to those his company will produce that can be stored at fridge temperatures.
For India, which has struggled to contain the world's second largest Covid outbreak, negotiations with the Serum Institute on vaccine pricing will be pivotal for the country's efforts to emerge from the pandemic. India has set aside about Rs. 500 billion (US$ 6.7 billion) for vaccines, people with knowledge of the matter said last month. However, in September, Poonawalla argued that India would need Rs. 800 billion (US$ 10.72 billion). Close to US$ 300 million of the Serum Institute’ money has been invested in early production, said Mr. Poonawalla. The Bill & Melinda Gates Foundation and Gavi, the vaccine alliance, have also contributing US$ 300 million this year, earmarking 200 million doses for the Covax effort. That leaves about US$ 200 million left to bridge for Serum's planned expenditure.
Mr. Poonawalla said that fund-raising talks with Abu Dhabi and Saudi Arabia's sovereign wealth funds along with U.S. private equity firm TPG Capital are now "on hold" though may be revisited in a couple of months. Though the parties came close to a deal, Serum's plan to price its Covid-19 vaccines at a low level may not give them the returns they anticipate, he said.
"All of them wanted to give us about US$ 1.5-2 billion to dilute a stake in our company — I don't need all of it right now, the capital we've deployed already is enough," Mr. Poonawalla said, adding that advance orders recently signed with countries such as Bangladesh should fill the gap. Serum is also in discussions with India for an advance commitment. "I think in the next one or two months I'll be fully capitalized."
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