Pfizer/BioNTech COVID-19 Vaccine: A Reality Check (NYSE:PFE)

Source: Explained: The challenges in developing a COVID-19 vaccine

The COVID pandemic has destroyed global economies and this had led to an open checkbook in the search for a vaccine. However, in science facts matter and the size of the spend doesn’t guarantee success.

Things are looking challenging on the COVID-19 pandemic front. Yesterday there were 257,789 new cases globally, bringing the total cases to 16.2 million, and the US now has 4.3 million cases with 149,398 deaths. The US no doubt reached 150,000 deaths today. With no miraculous treatment options in sight, the focus is on development of a vaccine. Given that the global economy is effectively shuttered, a lot is resting on a vaccine. I’ve been reading optimistic stories about a vaccine by the end of the year with increasing scepticism.

Here I summarise my take on what is happening, and why assuming that the world economy will be heading back to normal in 2021 is probably delusional. I dig a little into the Pfizer (NYSE:PFE)-BioNTech (NASDAQ:BNTX) vaccine developments as an example to give a flavour of what is happening. I then overview other developments and consider why this is a hard problem. My take is that investors need to view sceptically a miraculous return to normal in 2021 and consider this as they decide how to play (or not play) in the current exuberant market. They might also consider whether they want a wild ride by investing in COVID-19 vaccine development.

The big picture

As has been the case for my articles relating to COVID-19, they only make sense if you have some sense of the nature of the problem and what needs to be done. Here I give more technical detail than is usual for Seeking Alpha (noting that I’m skating over a huge amount of information), but without this background it isn’t possible to evaluate how what is being done relates to the problems at hand. This stuff is pretty central to any investment analysis in 2020. I’m pretty sure many biologists are unaware how much their success or failure in the next 2 years is going to impact on human society for the coming decades.

What makes for a successful vaccine?

A vaccine is a device for protecting people from contracting an infectious disease even though they are exposed to the pathogen. To be successful the vaccine must involve some way of making the body capable of resisting a pathogen like the SARS-CoV-2 virus which causes COVID-19.

The steps required for making a vaccine and protecting the population:

i) Mechanism of action: The human defence system is complex, but basically there are two components to immunity: i) antibodies which are proteins that bind to the pathogen and get the body to knock it out and ii) cell-based immunity, where a special class of cells called T-cells attack the virus.

ii) How long is the vaccine protective?: A second aspect of a successful vaccine involves time. It is good to get protection but if it only gives protection for a month this is not of much benefit.

iii) Safety: Finally a vaccine has to be safe. A vaccine that works safely for most people is still not useful if it makes a subgroup of people ill or worse kills them.

iv) Scale up for mass production: This is where vaccine programs get really expensive, because the goal of giving everyone on the planet a COVID-19 vaccination is a huge task.

Normally, sorting out an effective mode of action is a drawn out process that involves ingenuity and persistence. It is slow, especially when you are tackling a group of viruses (coronaviruses) to which no successful vaccine has ever been produced. Then you have to establish that the vaccine is going to be useful (i.e. provide long enough protection to make producing it worthwhile). There are some shortcuts, but at the end of the day to establish for example that a vaccine is effective for 2 years, you need trials to show that (i.e. trials that go on for 2 years). Safety is likewise a longwinded process that needs lots of caution.

Safety trials always start in animals, before progressing to trials with a few people, because if the vaccine (or treatment in the case of drugs) is not safe, the volunteers’ lives are in danger. There have been examples of this, perhaps the most famous being a drug called TGN1412 which was supposed to stimulate the immune system. It worked safely in various animal models, so the trials proceeded to healthy volunteers. Six human volunteers were treated with a dose 500 times lower than what worked safely in animals. Within minutes it became clear that the human immune system went crazy with this drug. All six human volunteers faced life-threatening multi-organ failure in intensive care. They survived but this was a cautionary tale.

I raise this case here because one of the features of coronaviruses is that they mess with the immune system in some patients. Not everyone gets sick and so the danger of SARS-CoV-2 is about a subgroup of people whose immune systems are a bit different. The concern about the safety of a COVID-19 vaccine is therefore not a remote speculation. There are grounds for being careful. Note that there have been almost no animal trials conducted with the urgent COVID-19 vaccine development. Human volunteers are the guinea pigs.

Where are we up to with a vaccine to protect from COVID-19?

Pfizer-BioNTech partnership

Pfizer and BioNTech have been working together since 2018 on new mRNA technology for vaccine development. Initially this involved the search for an influenza vaccine, but now it has switched to the search for a vaccine for COVID-19.

The thing about reporting on the status of COVID-19 vaccine development is that all of the rules are being broken and terms that have specific meanings no longer get used in the way that they are meant to convey.

In case of the Pfizer-BioNTech COVID vaccine trial, the current status can be viewed in detail on clinical “Study to Describe the Safety, Tolerability, Immunogenicity, and Efficacy of RNA Vaccine Candidates Against COVID-19 in Healthy Adults.”

This is a Phase 1/2/3 trial. Note Phase 1, Phase 2, Phase 3. The trial is scheduled to be completed on January 23, 2023… Yes, this isn’t a typo, the study is due for completion at the start of 2023. What happens in 2021 and 2022 will be crucial in determining if there is a vaccine that is worth developing. Any scale up that happens before the end of the trial will be based more on wishes than reality.

So what has been achieved by July 2020, noting that the study started on April 29, 2020? reports no results yet.

Now the headlines concerning this trial:

“Early trial results keep Pfizer vaccine development on track for possible 2020 distribution” This article claimed that the report caused Pfizer’s stock price to rise.

“Coronavirus vaccine developers to launch Phase 3 studies in US.”

“Pfizer, BioNTech nab fast track tag, prep for major phase 3 COVID-19 vax test this month.”

Each of the above stories represents things that have not been achieved. Glossed over are a very large number of steps normally taken in developing a vaccine. For starters, it is normal to develop animal models to test a prospective virus before moving to testing on humans. This is complex. For almost all SARS-Cov-2 vaccine studies, animal models have not even been considered. This is fine as long as human tests don’t throw up dangerous side effects.

A Phase 1 trial typically involves small numbers of healthy patients to check immediate safety concerns. This stops developments where there are immediate problems. COVID-19 kills a small percentage of patients leaving many people with the infection with modest symptoms or even unaffected. This is especially the case with younger people, where only a small percentage of those infected get seriously ill. The point is that the SARS-CoV-2 virus only catastrophically affects a subset of patients.

Call me cautious, but I think people who are going to be badly affected by the virus need to be checked to make sure that they aren’t going to be badly affected by the vaccine. Given that it is reported that only 60 healthy adults (18-55) have been given a vaccine candidate as yet, I doubt that anyone who might be badly affected by infection has seen the vaccine yet. Moreover, while nothing has been officially published yet, the Fiercebiotech report (which presumably came from a briefing with the trial organisers) indicates that the successful antibody response “did come with side effects.” Remember these were healthy volunteers…

Normally, after at least one Phase 1 trial is completed, the results are reviewed before proceeding to Phase 2, where an effective dose is sorted out to move to a Phase 3 trial where whether the vaccine works or not is tested.

At this stage, there is also a close look at broader safety concerns. This is why the trial won’t be completed until 32,000 participants have been treated with the candidate vaccine and this will not happen until January 2023. This includes participants in the 60-85 age range.

Of course, if Pfizer/BioNTech get funded by the US Government they will no doubt scale something up, but the chances of success seem pretty remote.

The Pfizer-BioNTech vaccine is an mRNA vaccine. Many investors may not be interested in what this means, but the important thing to note is that there is yet to be a successful mRNA vaccine developed, not ever, because the technology is so new. The Moderna (NASDAQ:MRNA) COVID-19 vaccine (see below) is also an mRNA vaccine.

There has never been a successful vaccine of any kind developed to any coronavirus.

Perhaps a clue to what is going on here is that the Trump administration has announced a $1.95 billion contract for 100 million doses (with rights to another 500 million doses) of a Pfizer-BioNTech vaccine by December. This reflects Governmental urgency to neutralise the COVID-19 pandemic. It would be very hard for Pfizer to turn down $1.95 billion funding… although the cash doesn’t get handed over until the vaccine is approved by the FDA and 100 million doses delivered. If a vaccine gets scaled up by December, it means that the vaccine composition is decided upon before there is even a minimal basis for safety and effectiveness. It is flying completely blind.

And to be clear how untried this project is, the technology used to make the vaccine (mRNA-based rather than inactivated live virus or viral protein) has never yet been used to produce any approved vaccine. Dr. Kathrin Jansen, Head Vaccine R&D at Pfizer has defended the adoption of technology that hasn’t been used before saying that criticism of the new approach is “… not a scientific mindset … just because it is new, it will fail.”

Dr. Jansen has a proud track record as she led the development of the cervical cancer vaccine Gardasil at Merck (NYSE:MRK). She made a good point that Gardasil used new technology in its development (it is based on a genetically engineered protein manufactured in yeast) and that this is how science progresses. The confronting thing however is that the development of Gardasil started in the 1990s and it was not approved by the FDA until 2006.

AstraZeneca and Oxford University partnership

Ignoring just about every step in a vaccine development program isn’t just happening with Pfizer in the US. In the UK, AstraZeneca (NYSE:AZN) is involved with an Oxford University group in a similar mad scramble with the UK Government having signed up for 100 million doses should a vaccine be produced. AstraZeneca is more cautious about the stage of development of their vaccine with Oxford University. While antibody and T-cell responses have been observed (like the Pfizer-BioNTech vaccine), a leading academic Chief Investigator Andrew Pollard at Oxford University stated “… we need more research before we can confirm the vaccine effectively protects against SARS-CoV-2 (COVID-19) infection and for how long any protection lasts.”

This is a much more accurate statement as to where the vaccine development sits. The initial data in the AstraZeneca trial involves 1,077 healthy adult (18-55) participants, although most of these participants received just a single dose of the potential vaccine. Ten, repeat 10, participants received a second dose a month later and it is this group that might be providing the basis for moving forward on how the vaccine will be formulated.

There were minor side effects in these healthy individuals. I wonder again what effect the vaccine might have on people who are likely to get seriously ill or die (obese, heart conditions, elderly) if they get infected by SARS-CoV-2. These people need to be able to be given a vaccine safely. The AstraZeneca/Oxford University vaccine is a more conventional vaccine based on inserting the SARS-CoV-2 spike protein gene into a harmless virus and infecting vaccine recipients with this hybrid virus.

Maybe it is just the difference between a US and European view of where a vaccine project sits, but I detect a much more cautious approach by AstraZeneca concerning how far along the vaccine development is.

Moderna And NIH Vaccine Research Center

Another high profile COVID-19 vaccine development which also uses mRNA technology is on a parallel track to the Pfizer-BioNTech project. This project involves the Vaccine Research Center at the NIH National Institute of Allergy and Infectious Disease in partnership with Biotech company Moderna, which has never developed a vaccine. Some complexities of the Moderna project are described in an interview with Dr. Barney Graham, the Deputy Director of the Vaccine Research Center.

The discussion is complicated but it indicates that the core ingredient of the proposed vaccine is by no means straightforward. Perhaps to show how much novelty is stitched into the COVID-19 vaccine developments, Moderna is now in a patent fight with Arbutus Biopharma (NASDAQ:ABUS) about how the key mRNA molecule gets delivered in the Moderna candidate vaccine. This has led to a recent reversal in the stellar stock price rise for Moderna.

45 people received the initial Moderna candidate vaccine and 3 of these had a significant adverse reaction. Notwithstanding the adverse reaction in healthy young people, the urgency to get a result means that the Moderna candidate marches on towards much larger trials, where its safety (with people at risk) and efficacy will be properly examined. But there is no sign that traditional caution will be exercised in the search for a vaccine (any vaccine).

There are more than 100 vaccines under development for COVID-19 and all of them involve open checkbooks. Literally, $billions are being spent without any of the basic checks and balances that normally control spending on innovative programs in science. The number of “firsts” (i.e. never before tried) in the COVID-19 program is astonishing. Of course, if an effective vaccine gets developed, it will allow significant normalisation of the world economy.

The likelihood of a vaccine that gets the world back on track even within 5 years has odds that are similar to backing a horse that has never raced in a major international carnival. The reason I’m labouring this is because much of the market seems to be assuming that things are going to snap back to normal in 2021. I think investors need to understand that this is a very remote possibility. This might change how one sees investment today.

Vaccines and coronaviruses

To help non-scientists get a sense as to how risky the COVID-19 vaccine programs are, here I provide a snapshot of vaccine development more generally and also the status of the search for a vaccine for other coronaviruses.

One of the fastest-ever developed vaccines was against the mumps virus. It took 4 years. Admittedly, this was an inactivated vaccine that involved making an attenuated version of the virus. It did not involve starting out on a completely new way of preparing vaccines as is happening for several of the lead COVID-19 vaccine programs.

As indicated above, focus of current programs is on getting an antibody and T-cell response from vaccination that mimics the antibody/T cell responses of people who have recovered from SARS-CoV-2 infection. This is a good start, but it says nothing about how long the response lasts for, nor whether there are people for whom the vaccine will be dangerous.

The story of the development of a vaccine for Dengue fever, which is caused by a different kind of RNA virus (a Flavivirus) is a cautionary tale. This took a very long time, only being approved by the FDA last year (Dengue virus was discovered in 1943). The point about the dengue vaccine (called Dengvaxia) is that it is potentially harmful for people who have NOT been infected by Dengue virus. So it is only used for people who have had Dengue fever. There are special reasons why Dengvaxia is useful despite not being used on people who haven’t had Dengue.

In the case of HIV (AIDS), attempts to develop a vaccine (which have failed) led to increased sensitivity to infection (i.e. it made things worse than no vaccine).

Concerning attempts to develop vaccines to any coronavirus, while all have failed, there is some knowledge about the problems of developing any coronavirus vaccine. Particular problems encountered in attempts to develop a vaccine to MERS-CoV included: i) coronavirus immunity often doesn’t last long and may not even prevent infection; ii) a significant group needing protection are the elderly and there are special problems of developing immunity in this group; iii) vaccine candidates may make things worse for the immune response in the lungs. MERS vaccines have not progressed beyond animal trials.


If you are getting the impression that every rule in the book has been torn up in the COVID-19 vaccine programs, you are correct. Corners are being cut, new technologies introduced and scale is happening long before there is any basis for scale up. Given that COVID-19 has destroyed the global economy, one can see grounds for tearing up the rule books, but it doesn’t change the fact that the chances of success in the timelines being considered are remote. Investors need to make decisions about investment based on likely conditions, not the ones that everyone hopes for, avoiding all of the obvious reasons why it won’t happen.

It gives me no joy to paint a different picture to one where the COVID-19 pandemic will be over and done with by November. Vaccine development is a long and arduous process and no amount of money will solve this if the biology is not adequately understood. Indeed, it may well not be possible to develop an effective vaccine for the SARS-CoV-2 virus that causes COVID-19, and I think investors need to bear that in mind when making general investment decisions.

Conditions in the US have a huge influence on the market and it seems to me that currently, the connection between reality and hope has been lost in relation to this pandemic. Today’s reality is that yesterday in the US the total number of COVID-19 cases was 4,315,709 (with 67,413 new cases just yesterday) and the number of deaths reached 149,398 (908 new deaths yesterday, with California (90), Florida (125), Arizona (144) and Texas (137) being the hotspots). The death rate is now 451/million population. This is very challenging, but it is not an inevitable situation because there are methods for managing the pandemic working elsewhere around the world.

Perhaps a good comparison is Australia, which is a similar country to the US in many ways. Through a combination of cohesive (no blame) action between all levels of government, engagement of the citizens, social distancing, lots of testing and tracking/quarantine, Australia’s total cases yesterday were 14,403 (with 453 new cases yesterday) and total deaths were 155 (with 10 new deaths yesterday). The death rate is 6/million population.

Note that the US and Australia have comparable rates of testing (US 161,120/million population; Australia 154,114/million population) but a 75-fold difference in the deaths/million population. Both countries have similarly disastrous economic situations currently. I make this point to emphasise that the US is not powerless in addressing the massive death rate currently being experienced. The economy will not recover until citizens start to get confident that it is safe to open the economy up again.

As to Pfizer and BioNTech, Pfizer is a big pharma powerhouse and its future does not depend on developing a COVID-19 vaccine. Of course, if it is successful and it dominates global COVID-19 vaccine developments, this will impact positively on its share price. A recent article suggests that Pfizer could have a $15 billion boost from COVID-19 vaccine success. My take is that this won’t happen overnight, so investors looking for short-term upside are likely to be disappointed unless the hype continues. As to BioNTech, the company has already had a good run and I’m not convinced that things are going to go fast enough to justify investment at this time. The upside isn’t big enough considering the uncertainties and likely time frame even if the project is successful.

I am not a financial advisor but I have experience of the biotech industry and I follow closely new developments in the industry. If my commentary helps you and your financial advisor evaluate a possible investment in Pfizer or BioNTech (or other companies involved with COVID-19 vaccine developments), or indeed to think about the likelihood of a COVID-19 vaccine development by next year which could lead to recovery of the global economy, please consider following me.

Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.