Shares of COVID-19 vaccine makers plunged after U.S. President Joe Biden backed a proposed waiver for intellectual property rights even as the pharmaceutical industry, analysts and experts doubted its impact, saying the real problem is a lack of raw materials and know-how.
Pfizer, Moderna, Novavax and U.S. shares of BioNTech were down between 4 per cent and 10 per cent on Thursday. The slide in stocks was understandable, but likely an over-reaction, Zhiqiang Shu, senior biotechnology analyst at Berenberg in New York, said.
“The production of mRNA vaccines is not just about intellectual property. A lot of other things are in play, such as manufacturing know-how and capacity. Other companies or countries are unlikely to produce mRNA shots quickly,” he said.
The Biden administration move drew applause from patent activists and the World Health Organization as it could increase availability of vaccines to poorer nations including India, which is under the grip of a deadly second wave of infection.
However, implementing such a move could be a lengthy process as all 164 WTO member countries are required to arrive at a consent. .
The pharmaceutical industry, which has long defended patents as the key to research and development of new treatments, criticized the move, with its biggest lobby group warning that it would undermine pandemic response and compromise safety.
Several pharmaceutical analysts said IP waivers may on the surface help a world facing a pandemic, but manufacturing the vaccines was a barrier.
Jefferies analyst Michael Yee said while the proposal was not a good “headline” for biotech and could affect earnings, in reality, the bottleneck is neither access nor patents (or price) but simply that there aren’t enough vials, raw materials.
It would probably take a year after an IP deal was struck for anyone to make a vaccine, Scott Gottlieb, former head of the U.S. Food and Drug Administration and Pfizer board member said in a CNBC interview.
Moderna CEO Stephan Bancel too doubted if the IP waiver would help as its technology has been open since October to anyone for use during the pandemic.
“You cannot go hire people who know how to make the mRNA. Those people don’t exist,” he told investors.
Pharma shares lost ground elsewhere too, with Germany’s Curevac, which has sought approval for its COVID-19 vaccine, tumbling as much as 15 per cent.
Chinese vaccine makers slumped with CanSino Biologics Inc , a single-dose COVID-19 vaccine maker, down 16%. Its Hong Kong shares dived as much as 22 per cent. Shares in London-listed AstraZeneca were largely unchanged.
(Reporting by Julien Ponthus and Joice Alves in London, Danilo Masoni in Milan and Ankur Banerjee in Bengaluru Editing by Sujata Rao, Caroline Humer and Arun Koyyur)