…“from crisis to opportunity, lessons for Zambia”

Amb. Anthony Mukwita wrote from Berlin:

16th March 2021

Recently, I came across an insightful article in the UK Guardian newspaper discussing the covid-19 pandemic that has instantaneously given birth to a handful billionaires.

The quintessential silver-lining to every cloud.

The deadly pandemic has ostensibly further enriched those guys in the Billionaires club that were already rich such as the US$ 130 billion net worth Bill Gates and the US$190 billion networth Jeff Bezos of Amazon.

This is after the fact that the bug has already killed more than half a billion people in America alone and many more around the globe including my beautiful republic, Zambia, the country of 365 days of sunshine.

I thought to myself “this is a ´bloody´ topical story scrolled in blood that must be shared, as we say in media parlance, “if it bleeds, it leads.”

In this instalment of my bug story, I fully attribute everything to the Guardian which I will paraphrase and cite directly in most parts.

*THE VACCINE ARRIVES ON THE SCENE WITH PROMISES*

“The arrival of Covid-19 vaccines promises a return to more normal life – and has created a global market worth tens of billions of dollars in annual sales for some pharmaceutical companies,” writes the UK Gaurdian.

Among the biggest winners will be Pfizer and two different US pharma firms which are both charging more than $30 per person for the protection of their two-dose vaccines, about K658 in Zambian money.

While Moderna was founded just 11 years ago, has never made a profit before and employed just 830 staff pre-pandemic, Pfizer traces its roots back to 1849, made a net profit of $9.6bn last year and employs nearly 80,000 staff.

But other drugmakers, such as the British-Swedish AstraZeneca and the US pharma Johnson & Johnson, have pledged to provide their vaccines on a “not-for-profit basis” until the pandemic comes to an end. This is commendable.

*WHAT DOES THE MARKET SAY ABOUT THE PLAYERS AND THEIR PRODUCTS?*

Whether the market remains a money-spinner in the future depends on whether the vaccines become the type that need just a one-off shot – as for measles – or if regular vaccinations will be required, such as for flu. But in the immediate future, there are big financial returns up for grabs say experts.

Here, we look at who is in line for the biggest gains – and which shareholders have already made fortunes.

*Pfizer/BioNTechmRNA vaccine*

Pfizer’s Comirnaty vaccine, developed with Germany’s BioNTech, is based on re-engineered messenger RNA – the molecule that sends genetic instructions from DNA to a cell’s protein-making machinery. It was the first to be approved and has to be stored at ultra-low temperatures (-70C).

This is a deal breaker for countries like Zambia in my view which would then need further investment in one off refrigeration facilities.

The report says “Governments have ordered about 780m shots, including the US (200m doses for $3.9bn) and the EU commission (300m), while 40m doses will go to lower-income nations like Zambia, via the Covax facility. It costs $39 (£28) for two doses in the US and about $30 in the EU.

*Expected sales in 2021: $15bn-$30bn*

Its reported that, “Pfizer, which splits costs and profit margins equally with BioNTech, expects $15bn in 2021 sales based on current deals. The final number could be twice as high, as Pfizer says it can potentially deliver 2bn doses this year.”

Barclays analyst Carter Gould is predicting sales of $21.5bn in 2021, $8.6bn next year and $1.95bn in 2023, on the assumption that the jab is given as a one-off shot. Pfizer and BioNtech shares are definitely rising through the roof in attractiveness.

ModernamRNA vaccine

The vaccine produced by the US biotech firm, based in Massachusetts, must be stored at freezer temperature (-20C). The UK has ordered 17m doses, the EU bought 310m with an option for a further 150m in 2022, while the US government ordered 300m shots. Japan purchased 50m shots. Moderna charges $30 for the required two shots in the US and $36 in the EU.

Expected sales in 2021: $18bn-$20bn

Moderna has said it expects 2021 sales of $18.4bn. Barclays analyst Gena Wang forecasts sales of $19.6bn, $12.2bn in 2022, and $11.4bn in 2023, assuming recurring vaccinations.

Share price change over past 12 months

+372%

A group of investors that backed the company when it was founded in 2010 will have made substantial returns. The chief executive, Stéphane Bancel, a 48-year-old French executive, owns 9% of the shares, now worth nearly $5bn.

*Johnson & JohnsonAdenovirus vaccine*

J&J’s jab, the world’s first single-shot Covid-19 vaccine, was developed by its Janssen division in Belgium. It uses adenovirus-26, a rare variant of cold virus. It was approved in the US in late February and can be stored at standard fridge temperatures for at least three months. Big orders include the US, UK (30m doses plus option for 22m), the EU (up to 400m doses), and Covax nations (500m doses through 2022).

Expected sales in 2021: up to $10bn

The company aims to deliver at least 1bn doses this year, which would generate $10bn. The US government has ordered 100m doses, with the option to buy 200m more, and is paying $10 a shot.

AstraZenecaAdenovirus vector vaccine

The vaccine developed with Oxford University uses a modified chimpanzee cold virus and can be kept at fridge temperature. Viral vector vaccines use a harmless virus to deliver a piece of genetic code to cells. Big orders have come from the UK (100m), the EU (up to 400m), the US (300m) and Japan (£120m).

Expected sales in 2021: $2bn-$3bn

Analysts at SVB Leerink are forecasting sales of $1.9bn this year and $3bn in 2022. The 2021 figure could be far higher if AstraZeneca achieves its ambitious target of 3bn doses. The company has pledged to supply the vaccine on a not-for-profit basis during this pandemic, and charges $4.30 to $10 for two doses.

Gamaleya Institute/Russian Direct Investment FundAdenovirus vaccine

Although it has not been approved by the EU regulator yet, Hungary and Slovakia have bought the Russian vaccine Sputnik V. In total, more than 50 countries, including Iran, Algeria and Mexico, have ordered it. AstraZeneca is testing a two-shot combination of its vaccine with Sputnik.

Expected sales in 2021: unclear but possibly billions

The developers are struggling to mass-produce Sputnik in Russia, but RDIF, a sovereign wealth fund, told the Financial Times last month that it had signed contracts with 15 manufacturers in 10 countries to produce 1.4bn jabs. The developers have said they would charge $20 or less for the required two doses internationally but are providing it free in Russia.

*LESSONS FOR ZAMBIA*

If what Dr Anthony Fauci, the USA bug Tzar says is true based on the science that another pandemic shall hit us, Zambia could position herself to be the next home and friend to Big Pharma by:

• Providing them land to set up factories and laboratories

• Labour from the more than 50pc youthful population

• Market from the more than 750 million members of COMESA for vaccines and a US$1 billion GDP

By the time the next pandemic cometh, Zambia could be inoculating millions in the region and beyond, with vacs manufactured at less then 10 bucks produced in our backyard. We only need to give big pharma something they don’t have in Europe, Russia and USA.

Affordable land, labour and the market to grow for exports. It’s a win win plan.

Check this statistic for instance which says about 700, 000 babies are born in Zambia annually, needing about 10 jabs each by the time they reach the age of 12 months. That is 7 million jabs alone before you throw in an extra jab of tetanus for pregnant Zambian women says an expert friend.

Imagine the gains if we partnered with big Pharma to produce in Zambia these jabs? How much foreign currency we could rake in? How much lives could we save? How our reserves would spike up?

The trade parlance goes, “when there’s blood on the streets, buy property.”

Our beautiful Zambia could make hay while the sun shines under the H.E Edgar Lungu administration as we pursue economic diplomacy.

The author H.E Anthony Mukwita is Zambia´s Ambassador to Germany. This personal essay was inspired by an analysis missive in the UK Guardian in March 2021 with full credits.

Source: UK Guardian, Zambia Daily Mail.