Covid-19: Race for a vaccine

10 September 2020

With many economic forecasts predicated on a Covid-19 vaccine being available by mid-2021 and providing the cornerstone of recovery, can normal testing processes be accelerated? And who picks up the bill for liability claims? flow's Clarissa Dann and Graham Buck review recent developments

But how realistic is it that a safe, trusted vaccine will really be available within 12 months when other vaccines have taken years to move from laboratory to market? And once licensed, what can be expected of human behaviour when it comes to rolling up a sleeve and accepting the injection?

As the Covid-19 epi-curve rises in many regions and restrictions tighten both for travel and social gatherings, hopes rest heavily on the early arrival of a successful, cost-effective vaccine for mass inoculation against the virus.

In our earlier article World economic outlook: the patient’s progress (14 August), we noted, “the recovery’s anticipated trajectory is heavily dependent on the current ‘progress on the vaccine front’”. Availability by mid-2021 would, predicted Deutsche Bank economists, “accelerate the move back out of recession in the second half and secure global growth of around 5.5%.”

Acceleration risks and liability claims

Dr Jeremy Brown, a US-based emergency medicine physician and author of ‘Influenza: The Hundred Year Hunt to Cure the Deadliest Disease in History’, questions the wisdom of fast-tack vaccines programmes such as Operation Warp Speed2, the US public-private partnership that aims to “deliver 300m doses of safe and effective Covid-19 vaccines” before 2020 is over.

His comments, published in The Spectator magazine (5 September),3 reflects on the 1976 mass immunisation programme in the US4 following an outbreak of swine flu, in which the vaccine was linked to an increase in reports of Guillain-Barré Syndrome. The Centers for Disease Control (CDC) halted the programme after only one in four Americans had received the vaccine, which still saw several thousand lawsuits and compensation payouts in subsequent years.

Brown noted, “Vaccine development also has its own laws, or rather guides that describe the way things usually happen. There are the four to six years of academic and lab research, followed by perhaps another three to five of human trials. These culminate in a Phase Three trial when the candidate vaccine is tested on thousands of people.

“Add several more years to gain approval from regulatory authorities and to build manufacturing plants, and you have a process that can easily last well over a decade. It took 14 years to create a vaccine for influenza; 20 years for polio. And then there is this: more than 90% of vaccines fail to make it through all these stages.”

A press release from the European Parliament, COVID-19: MEPs want safe vaccines, full transparency and liability for companies,5 summarises discussions between MEPs and Sandra Gallina, Deputy Director-General of the Commission's Directorate-General for Health and Food Safety. The release reports her observation, “Negotiations with companies had been difficult but underlined that those companies developing manufacturing COVID-19 vaccines would indeed be liable according to current laws and if something goes wrong they could be taken to court. This also goes for compensation for hidden defects.”

On 30 July Reuters reported on how indemnity from future liability claims has been “a tricky point in supply negotiations”.6

This article takes a closer look at the race for a vaccine, and shares findings in the Deutsche Bank Research report Everything We Know about a Covid-19 Vaccine, by Jim Reid, Marion Laboure and Luke Templeman in the Deutsche Bank Thematic Research team (2 September).

Key stages of development

“On average, once a vaccine for an infectious disease makes it to phase-three trials, it has an 85 per cent chance of being approved,” note the report’s authors. They continue, “As there are currently seven in phase-three trials, this implies six could be approved. However, we should caution that these are only the averages and no coronavirus vaccine has ever been tested or used at scale.”

Figure 1: Typical versus Covid-19 vaccine progress

Figure 1: Typical versus Covid-19 vaccine progress

Source : Deutsche Bank Research, The New York Times, weforum.org

Figure 1 highlights how the Covid-19 vaccine process would have to be accelerated for capability of launching by the end of 2020. The development process is summarised as follows:

  • Pre-clinical “Phase 0” where vaccines are not yet in human trials; rather, researchers give the vaccine to animals to see if it triggers an immune response. At the moment, there are 143 potential vaccines at this phase.
  • Phase 1 where the vaccine is given to a small group of people to determine whether it is safe and to learn more about the immune response it provokes. At the moment, there are a further 23 potential vaccines at this stage or beyond.
  • Phase 2 where the vaccine is moved into expanded safety trials and is given to hundreds of people. This further enables scientists to learn more about its safety and correct dosage. At the moment, there are 14 potential vaccines at this stage.
  • Phase 3. This is where the vaccine is in large-scale efficacy trials and is given to thousands of people to confirm its safety, identify rare side effects, and measure effectiveness. These trials involve a control group, which receives a placebo. At the moment, there are seven potential vaccines in this phase.
  • Approved with authority for use in the general population. At the moment, there are no vaccines in this phase. However, China’s vaccine candidate from CanSino Biologics has received limited approval for use by the Chinese military for a year from 25 June as a “specially needed drug”. Furthermore, on 11 August, Russia announced that its COVID-19 vaccine will be registered, in a step which is a precursor to mass vaccination. This makes it the first candidate to do so but there are concerns since the results of its Phase 1 and 2 trials were never published while Phase 3 trials began only last week and as per media reports only 100 people were inoculated with the vaccine by early August.
Jim Reid, Strategist, Deutsche Bank ResearchThe approval process is usually multiple times slower than what is occurring with the Covid-19 vaccine trials
Jim Reid, Strategist, Deutsche Bank Research

The frontrunners

Figure 2: Description of the top seven vaccine candidates

Figure 2: Description of the top seven vaccine candidates

Note: The range is from the actual start date of phase I to the estimated primary completion date of phase 3, when available.
Source : Deutsche Bank Research, WHO, The Guardian, Bloomberg, The New York Times, CNBC, Company press releases.

While no vaccine has yet been approved, the report notes that countries and organisations are already investing substantially in manufacturing facilities. They include The Bill and Melinda Gates Foundation, which has begun construction of plants for seven of the most promising vaccine candidates, while the US government has released funds to manufacture potential vaccines from AstraZeneca, Moderna, Emergent BioSolutions, and Johnson & Johnson.

China’s CanSino and Sinovac are building manufacturing plants to produce between 100 million and 200 million doses, while the Serum Institute of India has an agreement with AstraZeneca to produce one billion vaccine doses if Phase 3 trials are successful, of which 400 million are scheduled for production by the end of 2020.

Identifying the current frontrunners, the team reports that CanSino’s vaccine was the first candidate to reach Phase 1 and Phase 2 and vaccine candidates Sinovac, Sinopharm, Astrazeneca, Moderna, CanSino, BioNTech/Pfizer and Murdoch Children’s Research Institute all reached Phase 3 in July/early August. Although reaching Phase 3 does not always lead to a successful vaccine, it does indicate a high probability of success and typically 85% of new vaccines for infectious diseases successfully reach approval after reaching Phase 3 trials.

According to the World Health Organization, the top seven vaccine candidates, which are all in Phase 3, are more likely to reach approval quickly. They are being submitted by the following organisations: Sinovac; University of Oxford/AstraZeneca; CanSino Biologics Inc/Beijing Institute of Biotechnology; Sinopharm (Wuhan Institute of Biological Products/ Beijing Institute of Biological Products); Moderna/NIAID; BioNTech/Fosun Pharma/Pfizer and University of Melbourne/Murdoch Children’s Research Institute.

Taking the test

Reid and colleagues describe as “the big unknown” just how many people are willing to take a successful vaccine. “Although most people believe that others should get vaccinated, many are not willing to be vaccinated themselves, something that would enable the virus to continue spreading,” they observe.

Concerns have been amplified by the speed at which new vaccines are being developed and the economic damage that the pandemic has inflicted. The “political incentives” for a successful vaccine has, in particular, lead many to worry about whether “normal robust processes” are being followed.

“For instance, one survey notes that over three-quarters of Americans worry the vaccine approval process is being driven by politics. Given the presidential election is scheduled for November, if a vaccine is approved before then, it could help President Trump's re-election pitch but risks becoming highly-politicised.”

A Deutsche Bank Data Innovation Group (dbDIG) survey of more than 5,500 citizens in France, Germany, Italy, Spain, the UK and the US asked about their intention of being vaccinated for Covid-19 and found that the majority of people polled indicated they were willing to be vaccinated.

Most of the survey respondents plan to volunteer within the first six months after a vaccine is released, with the highest numbers in the UK and the US, where 61% and 59% respectively agreed they would readily be vaccinated within the first three months of a vaccine coming out (see Figure 3).

Figure 3: Citizens who plan to be vaccinated against Covid-19

Figure 3: Citizens who plan to be vaccinated against Covid-19

Source : dbDIG Primary Research. Note: consumers were asked the following question “Currently, many countries are trying to develop a vaccine for Covid-19. With this in mind, which if any, of the following sentences best describe you should a Covid-19 vaccine become widely distributed within the next three to six months?

The team adds that historically there has been resistance to vaccines and failures in distributing vaccines. More than one in 10 one-year-olds globally are not immunised against tuberculosis and hepatitis B, while less than half are vaccinated against pneumococcal disease or the rotavirus. The dbDIG survey also found that only one in three respondents were vaccinated last year for the flu. In Europe, only half of the population agreed that “vaccines are safe.”

Future scenarios

The report also notes that many in the scientific community believe that even with mass immunisation the pandemic could persist until 2025. More evidence on whether this will be the case will come during the coming winter season in the northern hemisphere. As people spend more time indoors, the transmission of the virus will more prevalent.

“At the same time politicians have to perform a balancing act,” the team notes. “While they do not want to encourage anything that risks a second wave, they are also now more cognisant of the financial and social cost of lockdowns. Thus, they may accept a certain level of Covid-19 as the price to pay for maintaining a certain level of economic activity.”

They add that a “safety first” approach is still supported by most people although that could change, particularly if governments reduce or end generous furlough income schemes. “On the other hand, it’s possible that following the winter, pressure will rise to return life back to normal, not least as the downsides of restrictions mount further, such as damage to the economy, education, mental health, crime, and those suffering from non-Covid conditions who have seen their treatment delayed.”

The team also believes that the proven downsides of full lockdowns make it unlikely that severe measures will be reintroduced – and the survey results indicate that fewer people would be inclined to comply with them in the event they did return.

Dr Tedros Adhanom Ghebreyesus, Director-General World Health OrganizationCOVID-19 is an unprecedented global health challenge that can only be met with unprecedented cooperation between governments, researchers, manufacturers and multilateral partners
Dr Tedros Adhanom Ghebreyesus, Director-General World Health Organization

Underspending on vaccines?

Noting that “a mere US$10bn” has so far been devoted to the cause of manufacturing and distributing vaccines, The Economist argued in its 6 August issue7 that the figure was not nearly enough and it was far better to spend too much that underspend. Even countries such as the UK and the US that have bought more than two doses for each of their citizens “have still not bought enough” the business weekly declared.

“Instead of seeing unproven vaccines as an extravagance, the world needs to think of them as an insurance policy. Research suggests that if ten or more vaccines are in development, there is a 90% chance of finding one which works. Once one of these candidates proves to be effective, billions of doses will need to be distributed quickly.

“But it is impossible to know in advance which candidate will succeed. Governments should therefore help pharmaceutical firms produce vast quantities of a range of different vaccines—ideally, numbering tens of billions of doses in all—long before regulatory approval is or is not granted. The winning vaccine could thus start to get to people quickly, even as doses of failed vaccines might be thrown away unused.”

And as the prospect of a successful vaccine emerging improves, the World Health Organization (WHO) has renewed its appeal against “vaccine nationalism”8 – in the form of an ‘every man for himself’ policy that prolongs the pandemic – rather than sharing vaccines for a collective solution.

In a speech delivered on 4 September, WHO Director-General Tedros Adhanom Ghebreyesus, said that 78 high-income countries had joined the “COVAX” global vaccine allocation plan that, led by WHO and the GAVI vaccine alliance (a global health partnership founded by the Bill and Melinda Gates Foundation) aimed at helping to buy and distribute vaccination shots fairly around the world. The new members brought the total to 170 countries, and the “number is growing”. Tedros urged others to join by the 18 September deadline for binding commitments.

Joining the plan guaranteed those countries access to the world’s largest portfolio of vaccines, with nine candidates currently in the pipeline and four more “promising”, he added.

But while Germany, Japan, Norway and the European Commission are among the new members of COVAX, other countries have secured their own supplies through bilateral deals. And leading those including that have said they will not join COVAX is the US. A partial global response rather than a fully coordinated one could yet prolong the pandemic.

A further reality check came earlier this month from the European Securities and Markets Authority (ESMA)9, which warned that equity markets could be expecting too much of an early vaccine launch, as evidenced by a decoupling between market performance and economic activity.

“The sustainability of the recent market rebound remains a concern,” ESMA noted. “Equity markets have surged by 40% in the euro area since the trough reached in mid-March, almost back to pre-crisis levels, while the IMF expects GDP to drop by more than 10% in 2020, followed by a mild recovery of 6% in 2021.”

With issues such as confidence in testing processes and ownership of future liability claims in the event of a vaccine having adverse effects still prevalent, framed with the overall desperation for a solution that brings the pandemic to an end, economic predictions look set to remain uncertain for many months to come.

Deutsche Bank Research report referenced:

Everything We Know About A Covid-19 Vaccine, by Jim Reid, Marion Laboure and Luke Templeman (2 September 2020)

Early Morning Reid by Jim Reid (9 September 2020)


1 See https://bit.ly/3mxZ3hd at astrazeneca.com
2 See https://bit.ly/2RbsM1J at defense.gov
3 See https://bit.ly/3bKUJa6 at spectator.co.uk
4 See https://bit.ly/3bHpAo5 at who.int
5 See https://bit.ly/33dUDUG at europarl.europa.eu
6 See https://reut.rs/35qvOYa at uk.reuters.com
7 See https://econ.st/32dpAc9 at economist.com
8 See https://reut.rs/3bQWRNG at reuters.com
9 See https://bit.ly/3bHwsBT at esma.europa.eu

Stay up-to-date with

Sign-up flow newsbites

Choose your preferred banking topics and we will send you updated emails based on your selection

Sign-up Sign-up

Subscribe Subscribe to our magazine

flow magazine is published twice per year and can be read online and delivered to your door in print

Subscribe Subscribe



Climbing out of Covid: Nearly there? Climbing out of Covid: Nearly there?

Good news on vaccines suggests some form of normality could return sooner rather than later. However, scalability, distribution priorities, and trust in governments will all determine the speed. flow’s Clarissa Dann shares insights from Deutsche Bank Research

Climbing out of Covid: Nearly there? More


Coping with Covid-19 Coping with Covid-19

With the coronavirus now pronounced a pandemic by the World Health Organisation and lockdown imposed on more regions and cities, what will be the impact on the global economy? flow reviews extracts from Deutsche Bank research

Coping with Covid-19 More


Covid-19: A new industrial policy for Europe Covid-19: A new industrial policy for Europe

As the European Union (EU) absorbs its €2.364trn pandemic support and rebuilds, how can the market forces/state intervention balance be managed to avert market failure? flow ’s Clarissa Dann and Graham Buck

Covid-19: A new industrial policy for Europe More