All I want for Christmas is vaccines

Posted on Wednesday 2 December 2020 by Adam Simmonds | Investment Research Analyst

The past couple of weeks have been littered with announcement after announcement about vaccines, Pfizer & BioNTech, Moderna, and Oxford University & AstraZeneca. All have been featuring in the news with their promising results that are potentially paving the way for a return to normality.

Vaccines, vaccines, and more vaccines

First came the Pfizer & BioNTech partnership. Announcing that their vaccine has been found to be more than 90 percent effective, prompting a 15 percent and 25 percent increase in share price for Pfizer and BioNTech respectively. Even better still, the release of new data bumped the effectiveness up to 95 percent.

Then came Moderna with a vaccine that is 94.5 percent effective, resulting in a 10 percent jump in share price. Giving the firm a market capitalisation of $39 billion.

Another vaccine that is of particular interest here in the UK is the one being developed in partnership by the University of Oxford and the Pharmaceutical giant AstraZeneca. Having just recently announced results for a variety of different dosing regimens, their vaccine has achieved an efficacy of up to 90 percent.

All these vaccines are boasting efficacy far above that of the 60-70 percent range that was being predicted mere months ago. And are the first of 43 vaccines releasing results of their effectiveness in treating COVID-19.

Government funding for vaccine development

Part of the reason why focus is on these companies and potentially explaining their success thus far is owing to the size of government grants that they have received. The only member of the above that has not received any government funding is Pfizer. All the government funding that Pfizer has benefitted to has come from the side of BioNTech, with its $445 (375€) million from the German Federal Ministry of Education and Research.

Moderna on the other hand has seen two grants offered by the US government’s Biomedical Advanced Research and Development Authority (BARDA), as part of the US’s operation warp speed. Initially receiving $483 million and a further $472 million three months later.

Oh, and although she is not a sovereign state let us not forget the $1 million donation made by Ms. Dolly Parton towards the Moderna vaccine efforts.

Interestingly the Oxford & AstraZeneca partnership have received over $1 billion from BARDA but only $79 (£65.5) million from the UK Government.

Creating a route for innovative start-ups

Clearly from such big numbers at play and the pressing nature of the work, from an investors point of view, vaccines are big business.
With this in mind, I would like to draw your attention to Moderna. Although the aforementioned increase in share price has not proved sustainable, which is at least partially attributable to the sheer number of 123 vaccine competitors seeking to provide us with magical vials to getting life back to normal. The story of Moderna proves to be an interesting one.

Little more than a concept-company 10 years ago, Moderna is arguably still a start-up. Rather than an entrepreneur setting up the company and being sought out by investors to take it to the BioTech powerhouse, it is proving to be today. Moderna took a different route. Formed in-house at Flagship Pioneering, a BioTech focused Venture Capital firm. They assembled a team around the nascent concept of mRNA (Messenger Ribonucleic Acid), seeing its potential for innovation. And $39 billion later look how well that has played out for them.

Behind this story is a simple message, sometimes a company or even a concept just needs the right people helping, a role we here at GovGrant often try to fill. So if ever you’re wondering if a start-up is the next big thing, they just might be.

GovGrant R and D A

About Adam Simmonds | Investment Research Analyst

Adam Simmonds | Investment Research AnalystWith a First-Class Bachelor of Science (BSc) in Economics and Finance, Adam’s role with GovGrant is to offer insight to the venture capital and private equity community. He brings fresh perspective, through the lens of IP, to identify value, risk and opportunity that is unlikely to have been considered by others. View profile


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