The battle of mRNA vaccine: Why did Moderna lose to Pfizer?

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The battle of mRNA vaccine: Why did Moderna lose to Pfizer?

The battle of mRNA vaccine: Why did Moderna lose to Pfizer?

Who will be the biggest winner of the mRNA COVID-19 vaccine in 2021? Now, Moderna has the answer: rival Pfizer.

On February 24, Moderna’s 2021 annual report was released. The annual sales of mRNA COVID-19 vaccine Spikevax was 17.7 billion US dollars, and 807 million doses of the vaccine were sold [1] , far less than Pfizer-BioNTech (Pfizer-BioNTech) The results of the COVID-19 vaccine Comirnaty: 3 billion doses produced (2.6 billion doses delivered), sales of 36.781 billion US dollars. [2]

When the global COVID-19 epidemic broke out in 2020, Moderna not only had a market value much higher than that of Baintech, but also had the world’s first mRNA COVID-19 vaccine to enter clinical trials… Everything was beautiful at that time. Why is this star company still losing to its rivals?

From the first discovery of mRNA in 1961, to the large-scale production of mRNA vaccines in 2021, humans have gradually perfected the theory and experiments of mRNA vaccines, and formed a complex patent network.

The battle of mRNA vaccine: Why did Moderna lose to Pfizer? COVID-19 vaccine patent network information based on mRNA technology, source丨Nature [3]

The data shows that the German biotech company CureVac holds the most patents, followed by Moderna and Baintech. [4] But it was the latter two companies that really made the mRNA vaccine shine.

Before 2020, Moderna’s boss was a regular visitor to the media, while Baintyco was extremely low-key. This German biotech company has been doing research and publishing papers since its establishment.

After the outbreak of the COVID-19 epidemic, Moderna became low-key, and Biantech announced in April 2020 that it had reached a cooperation with Pfizer to develop a mRNA COVID-19 vaccine, and received an advance payment of $185 million from Pfizer (including about $113 million in equity). investment) and is eligible for future milestone payments of up to $563 million for a potential total consideration of $748 million [5][6] .

Since then, the story of the Biantech mRNA vaccine has become Pfizer. Afterwards, although some U.S. officials believed that this was the “biggest marketing coup in the history of U.S. pharmaceuticals” [24] , if it did not cooperate with the “cosmic pharmaceutical company” Pfizer, it was impossible for Baintech’s vaccine to surpass Moderna.

Pfizer’s overwhelming dominance in the supply chain is the most intuitive proof.

mRNA Vaccines: Competing in Global Supply Chains

After the mRNA COVID-19 vaccine entered mass production, it finally ushered in the most severe test-because of the large global vaccine demand base and the continuous counterattack of the epidemic, the production and supply chain of the mRNA COVID-19 vaccine encountered raw materials, production components, and peripheral materials ( Including single-use bioreactors for packaging mRNA feedstocks, borosilicate glass bottles for canning vaccines) and shortages of production personnel.

The production model chosen by the two companies determines their different fates. Baintech relies on Pfizer to enjoy the coolness, while Moderna uses a subcontracting model and finds CDMO as an OEM. The model is more conservative and the effect is worse.

Due to constraints such as patents and supply chains, Moderna has been dragged down by many links in the manufacturing process. And it all starts with lipid nanoparticles (LNPs).

Using existing technology vs. manufacturing equipment from scratch

Lipid nanoparticles are an important component in the manufacture of mRNA vaccines. Their role is to protect mRNA from being recognized and attacked by the immune system, and to deliver mRNA into cells. It includes four components (cholesterol, phosphatidylcholine, ionizable cationic lipids, and pegylated phospholipids).

Among them, the original patent for ionizable cationic lipids is owned by Acuitas Therapeutics, Pfizer-Biantech chooses to purchase non-exclusive licenses, and purchases four raw materials from Croda International; Moderna purchases four raw materials from Corden Pharma in Germany kinds of raw materials.

However, to circumvent the LNP patent, Moderna developed its own patented cationic lipid called Lipid SM-102 (although this patent is still in dispute with Arbutus Biopharma [7] ).

But when lipid nanoparticles wrap mRNA, “impingement jet mixing” is used to mix lipid nanoparticles with mRNA to form mRNA vaccine. The technical principle is: dissolve various lipids in ethanol, dissolve mRNA in acidic water buffer, mix quickly through the Y-shaped inlet, dilute the ethanol first, the solubility of the lipids decreases, and gradually precipitate out in the mixed solution to solidify and form Lipid nanoparticles, while efficiently encapsulating mRNA. Then, the residual ethanol is removed by ultrafiltration or dialysis with buffer membrane, and the pH value of the buffer is neutralized [9] .

In Europe, Pfizer-Biontech directly found a German company called Knauer as an OEM; in the United States, the Biden administration directly used the Defense Production Act (DPA) to allow Pfizer to quickly purchase equipment for filtering ethanol , Moderna uses self-developed cationic lipids, which requires special equipment and can only be manufactured from scratch [10] , which is one of the links that delays its mass production progress.

If the manufacturing process of lipid nanoparticles is the first obstacle for Moderna, then the weak ability to control the industrial chain, resulting in a further decline in production and delivery, is Moderna’s biggest pain.

Whole Industry Chain Control vs Problematic OEM

In order to avoid certain trade protectionist policies (for example, during the epidemic in the United States, raw materials are rarely exported overseas), Pfizer-Biontech and Moderna have established independent supply chains and production lines in the United States and Europe.

After all, Pfizer is a powerful “cosmic pharmaceutical company”: before the COVID-19 epidemic, it became the world’s “king of vaccines” due to the production of 13-valent pneumococcal conjugate vaccine, and incidentally became one of the world’s largest sterile suppliers [11] .

Industry chain information shows that Pfizer has production lines in the entire mRNA vaccine industry chain, and has stable industry control capabilities.

In addition, Biantech’s acquisition of the pharmaceutical factory of another multinational giant Novartis [12] can ensure that its industry chain will not be affected. Broken by a company accident.

Moderna is only involved in the production of APIs, and the rest of the links are either purchased or outsourced to foundries represented by the world’s three major CDMOs, Lonza, Catalent, and Thermo Fisher Scientific. . Therefore, as long as a key foundry falls off the chain, Moderna’s product supply will have problems.

In 2021, Moderna suffered the “Murphy effect”: the foundry Lonza was understaffed, and Moderna’s shipments were blocked.

Due to the continuation of the epidemic and the insufficient estimate of vaccine demand by Moderna’s partner Lonza (only 70 people were initially recruited), which led to the second quarter of 2021, Lonza’s European factories have been unable to recruit enough In order to recruit 100 more employees, it had to ask for help from many sources: in addition to mobilizing workers from other production lines of the company, Lonza also asked the Swiss government to relax entry requirements, and even planned to ask another major vaccine giant, GlaxoSmith gram for help.

But GlaxoSmithKline was not only developing its own vaccine for the COVID-19, but also producing vaccines for Novavax and Curevac, and was scratching its head because of the shortage of vaccine workers… Finally, the helpless Lonza found a Reuters article. help. [14]

In fact, supply chain and manpower shortages are common phenomena in the vaccine industry in 2021, and many vaccine companies, including Moderna, are in a dilemma. The shortage of manpower has slowed down Lonza’s production schedule, which in turn has led to delays in the delivery of the Moderna vaccine starting in April 2021. Moderna CEO Bancel even complained unabashedly in public. [15]

Moderna’s vaccine delivery delays hit a new high in the third quarter of 2021. The supply chain is so bad that Moderna officials have no confidence, and in the third quarter of 2021 financial report announcement, the annual vaccine delivery volume will be reduced to 700 million to 800 million doses, and the revenue will be reduced to 15 billion to 180 million US dollars. A quarter ago, Moderna was optimistic that it would deliver 800 million to 1 billion doses for the year and generate a revenue of $20 billion. [17]

As Moderna directly disclosed supply chain issues in its third-quarter 2021 financial report and lowered its full-year revenue expectations, its stock price plummeted 14% the next day, evaporating more than $19 billion in market value. [18]

However, various deficiencies and delays in the supply chain have nothing to do with Pfizer. At the end of the first quarter of 2021, Pfizer-Biontech even increased the production capacity of the mRNA COVID-19 vaccine for the whole year to 2.5 billion doses.

The supply chain is only a dominant problem of Moderna, and the deeper insufficiency may have to go back earlier – now let’s think about a problem: the mRNA vaccine manufacturing link mentioned above is also the company taken care of by “Warp Speed” , Why did the Biden administration directly use the “Defense Production Act” to take special care of Pfizer, so that it can quickly purchase key equipment for the production of mRNA?

Walking a tightrope: Pfizer Political Accelerator

The political orientation of American pharmaceutical giants is the projection of the two parties in the United States, and Pfizer is no exception.

The political orientation of large American companies depends on industrial policy, and different parties have different views: Democrats advocate universal health care, so they need to reduce medical costs and restrain pharmaceutical companies, while Republicans oppose universal health care and generally benefit pharmaceutical companies. Therefore, pharmaceutical giants such as Pfizer, Merck, Novartis, and GlaxoSmithKline are generally more inclined to the Republican Party when making political donations.

Back to Pfizer. Since 1990, Pfizer has published data on political contributions every two years. In 17 biennial reports, Pfizer was more Republican 11 times and Democratic only 6 times.

From 2014 to 2018, Pfizer has always supported the Republican Party. But in 2018, because the US pharmaceutical giants have raised drug prices, then President Trump sent a Twitter curse: “Pfizer and other companies should be ashamed that they have raised drug prices for no reason.” [19] , Since then, Pfizer’s political donations in 2019-2020 have clearly turned to support the Democratic Party.

The battle of mRNA vaccine: Why did Moderna lose to Pfizer? From 1990 to 2022, Pfizer’s political donation data to the two parties, source丨OpenSecrets [20]

The origins of Democratic President Biden and Pfizer can be traced back even further. One of the key figures connecting the two is Greg Simon.

Greg Simon is a political and business activist. From 1993 to 1997, he served as chief domestic policy adviser to Vice President Al Gore, and then founded the lobbying firm Simon Strategies; in 2000, he briefly served as an adviser to Gore’s presidential campaign Lost by a narrow margin to Bush Jr.), in 2008, he was the director of the Health and Human Services Review Panel during the Obama-Biden transition period; from 2009 to 2012, he returned to the business world and served as Pfizer’s senior vice president of global policy and patient relations, Re-entering politics in 2016, he was the executive director of then-Vice President Biden’s Cancer Moon Shot. [twenty one]

Thanks to Simon, the “revolving door” in the political and business world, Pfizer and Biden are getting closer. Pfizer generously donated $1 million [22] at the inauguration after Biden was elected president (Modener’s lobbying amount for 2021 is only $550,000). And Biden also reciprocated, and he did not lose face and stature to Pfizer.

The battle of mRNA vaccine: Why did Moderna lose to Pfizer? Moderna’s political lobbying amount over the years, source丨OpenSecrets [35]

For example, giving Pfizer more policy tilt.

After the implementation of the “Operation Warp Speed” (OWS) plan in August 2020, key companies in the supply chain of vaccines and pharmaceuticals will receive special attention from the “National Defense Production Law” to ensure that key companies are in production.

Priority access to critical supplies and critical instrument parts. There are 18 of these key companies, including vaccine companies such as Pfizer, Moderna, AstraZeneca, Novavax, and Sanofi. [twenty three]

In the early summer of 2020, the U.S. government negotiated with Pfizer to purchase the mRNA COVID-19 vaccine. The CEO of Pfizer personally went into battle and negotiated with regulators and the White House.

The initial price of the vaccine was $100 per dose and $200 per course of treatment. The FT, citing former government officials, said the head of Operation Warp Speed, Moncef Slaoui, who was involved in the negotiations, expressed shock at the price while warning it was an attempt to make a fortune from the coronavirus pandemic .

Although the final transaction price was set at $19.5/dose, the price was still higher than the adenovirus vector vaccine of Johnson & Johnson and AstraZeneca. [twenty four]

Not only the United States, but Pfizer has shown unusual strength in negotiating vaccine contracts with governments around the world.

PublicCitizens lists negotiating materials in nine countries, citing Peter Maybarduk, director of the Public Citizen’s Access to Medicines program, saying that Pfizer “uses the scarce vaccine it controls to get Privileged by people who have no choice,” and slammed its “dominance of sovereign states as a fundamental challenge to the global pandemic response.” [25]

The version time of the 9-nation negotiation terms listed by PublicCitizens lasts from July 2020 to March 2021. Pfizer is so strong that it is impossible for Biden to be unaware. However, in January 2021, after Biden came to power, he still expanded the priority rating of Pfizer through policy tilt for the first time .

This move gives Pfizer greater advantages in the supply chain, including: priority access to lipid nanoparticles (LNP), priority access to key equipment components such as filling pumps and tangential flow filtration skids. The official U.S. spokesperson also unabashedly stated: “Our first action is to provide Pfizer with more equipment and supplies so that they can increase production and provide more vaccines.” [26]

Biden also went to Pfizer’s Kalamazoo vaccine production line to visit, and in his on-site speech, he praised Pfizer CEO Albert Bourla [27] . In order to show intimacy, Biden called Bola a “good friend who is helpful” in public six months later [28] . At the end of 2021, when Biden received the Pfizer booster shot, he also broadcast live via video.

The battle of mRNA vaccine: Why did Moderna lose to Pfizer? Biden calls Pfizer CEO a “good friend”, source丨White House official website [28]

Not only does it receive special care from the Democratic Party, but the public generally agrees with Pfizer. Due to adverse reactions to the vaccines of Johnson & Johnson and AstraZeneca, the governments of various countries lacked trust, and the production of vaccines by the two companies declined, while the delivery of Moderna could not keep up. Only Pfizer could not lose the chain.

The record and amount of the official purchase of Pfizer and Moderna’s COVID-19 vaccine by the United States.

Data丨medicalcountermeasures.gov [29]

In the perception of many Americans, the COVID-19 vaccine of Pfizer-Beintech is almost equal to the COVID-19 vaccine itself. Americans who have been vaccinated against the COVID-19, including former President Trump, will say “I got the Pfizer” if they have been vaccinated. [30]

Relying on the mRNA COVID-19 vaccine to return to the throne of “the king of vaccines”, Pfizer has its own profound means to reach a cooperation with Baintech in time, in addition to knowing the money. In contrast, Moderna, who did not receive special care from the Biden administration, seemed a bit “stupid” from the research and development stage.

Moderna: Gains and Losses

In July 2020, Moderna executives got into multiple spats with the FDA, the NIH and their outside scientists. Some disputes, such as government experts’ insistence on closely monitoring trial participants who may have contracted Covid-19 for changes in oxygen levels that could signal dangerous complications, have been dismissed in the media’s view as unnecessary.

The NIH had hoped to launch a large-scale trial by July 10, 2020, but the futile arguments delayed the plan by two weeks. [31]

If you look back at the company’s culture under the influence of Moderna’s CEO, you probably won’t be surprised by this kind of thing.

Noubar Afeyan, founder of the investment agency Flagship Pioneering, is also an early investor and chairman of Moderna’s board of directors, he has repeatedly invited Stéphane Bancel to join him and take care of him. Invested in start-up companies.

Bancel sneered at most companies [32] , but only had a soft spot for Moderna. He became the company’s CEO in 2011 and raised $40 million in financing for the company in 2012. That same year, pharma giant AstraZeneca agreed to pay $240 million for patents on dozens of mRNA drugs that had yet to be developed. [33]

Bancel, a financing guru, has threatened to raise $1 billion over five years and $2 billion before going public in 2018 to get Moderna going fast. This number exceeded the limit of most innovative drug companies at the time.

In the fast-growing, fast-financing Moderna, the conceited, controlling, and impatient CEO of Science has established a corporate culture of “blaming each other”, where he is scolded and even fired on the spot for failed experiments. As a biotech company, Moderna is not keen to publish its work in Science or Nature, but prefers to promote it on CNBC, CNN and the like in Silicon Valley style that everyone can understand mRNA technology. [34]

After the outbreak of the COVID-19 epidemic, Pfizer announced or interviewed relatively openly and transparently, introducing industrial chain and technical details, while Moderna kept a low profile.

The company seems to be gradually overcoming the character flaws brought on by its CEO, but not all—which is why it has the guts to go against the government when designing a clinical trial program, despite receiving $500 million in funding from the U.S. government.

On December 11, 2020, Pfizer-Biontech’s COVID-19 vaccine received FDA emergency use authorization (EUA), and a week later, Moderna’s vaccine received emergency use authorization;

On August 23, 2021, the Pfizer-Biontech COVID-19 vaccine was officially approved by the FDA, and Moderna’s vaccine was officially approved until January 31, 2022.

In the battle of the mRNA COVID-19 vaccine, the biggest test is the supply chain, so it is not surprising that Moderna lost to Pfizer. However, in the competition between Pfizer-Beintech and Moderna, there are still some deep questions worth thinking about –

For example, an emerging biotechnology company can make more money with its own production model, or become a partner of a traditional giant and save the world with a cooperative model.

Which route is more successful? Is it to take government money and compromise in R&D, or like Pfizer to refuse government investment and have a higher degree of freedom in R&D?

References：

[1] Moderna 2021 Financial Report https://investors.modernatx.com/news/news-details/2022/Moderna-Reports-Fourth-Quarter-and-Fiscal-Year-2021-Financial-Results-and-Provides -Business-Updates/default.aspx

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[6] Pfizer and BioNTech Announce Further Details on Collaboration to Accelerate Global COVID-19 Vaccine Development https://www.pfizer.com/news/press-release/press-release-detail/pfizer-and-biontech-announce-further-details-collaboration

[7] Reuters：Moderna loses challenge to Arbutus patent on vaccine technology https://www.reuters.com/article/us-moderna-patent-idUSKCN24O2XY

[8] Exploring the Supply Chain of the Pfizer/BioNTech and Moderna COVID-19 vaccines https://blog.jonasneubert.com/2021/01/10/exploring-the-supply-chain-of-the-pfizer-biontech-and-moderna-covid-19-vaccines/

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[12] BioNTech：BioNTech to Acquire GMP Manufacturing Site to Expand COVID-19 Vaccine Production Capacity in First Half 2021 https://investors.biontech.de/news-releases/news-release-details/biontech-acquire-gmp-manufacturing-site-expand-covid-19-vaccine/

[13] Peterson Institute for International Economics. How COVID-19 vaccine supplychains emerged in the midst of a pandemic https://www.piie.com/sites/default/files/documents/wp21-12.pdf

[14] Reuters：Help wanted: Lonza seeks workers to lift Moderna vaccine output https://www.reuters.com/business/healthcare-pharmaceuticals/switzerlands-lonza-boost-production-moderna-covid-19-vaccine-2021-04-29/

[15] FirecePharma：The next big COVID-19 bottleneck? A shortage of trained vaccine workers, experts say https://www.fiercepharma.com/manufacturing/next-big-covid-19-bottleneck-a-shortage-trained-vaccine-workers-pharmas-and

[16] Moderna 2021 Third Quarter Financial Report https://investors.modernatx.com/news/news-details/2021/Moderna-Reports-Third-Quarter-Fiscal-Year-2021-Financial-Results-and- Provides-Business-Updates-11-04-2021/default.aspx

[17] Moderna Q2 2021 Financial Report https://investors.modernatx.com/news/news-details/2021/Moderna-Reports-Second-Quarter-Fiscal-Year-2021-Financial-Results-and- Provides-Business-Updates-08-05-2021/default.aspx

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[19] Politico：Trump criticizes Pfizer following price increase https://www.politico.com/story/2018/07/09/trump-criticizes-pfizer-674611

[20] OpenSecrets：Pfizer-Total Contributions by Party of Recipient https://www.opensecrets.org/orgs/pfizer-inc/totals?id=D000000138

[21]Greg Simon https://theforum.sph.harvard.edu/expert-participants/greg-simon/

[22] Reuters：Pfizer, unions, others donated $61.8 mln for Biden’s inaugural https://www.reuters.com/world/us/pfizer-unions-others-donated-618-mln-bidens-inaugural-2021-04-21/

[23] DividsHub：Defense Production Act is shot in the arm for Warp Speed’s mission https://www.dvidshub.net/news/386211/defense-production-act-shot-arm-warp-speeds-mission

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[25] PublicCitizens：Report: How Pfizer Silences World Governments in Vaccine Negotiations https://www.citizen.org/news/report-how-pfizer-silences-world-governments-in-vaccine-negotiations/

[26] SupplyChainDive：Pfizer gets boost from DPA, adds suppliers to make 2B vaccine doses https://www.supplychaindive.com/news/pfizer-vaccine-covid-expanding-manufacturing-capacity-dpa-biden/594680/

[27] TheWhiteHouse：Remarks by President Biden at Pfizer Manufacturing Site https://www.whitehouse.gov/briefing-room/speeches-remarks/2021/02/19/remarks-by-president-biden-at-pfizer-manufacturing-site/

[28] TheWhiteHouse：Remarks by President Biden at Virtual Global COVID-⁠19 Summit https://www.whitehouse.gov/briefing-room/speeches-remarks/2021/09/22/remarks-by-president-biden-at-virtual-global-covid-19-summit/

[29] BARDA’s Expanding：COVID-19 Medical Countermeasure Portfolio https://www.medicalcountermeasures.gov/app/barda/coronavirus/COVID19.aspx?filter=vaccine

[30] Trump: ‘I got the Pfizer’ https://finance.yahoo.com/news/donald-trump-i-got-the-pfizer-125703879.html

[31] Reuters：Exclusive: Moderna spars with U.S. scientists over COVID-19 vaccine trials https://www.reuters.com/article/us-health-coronavirus-moderna-exclusive/exclusive-moderna-spars-with-u-s-scientists-over-covid-19-vaccine-trials-idUSKBN2481EU

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[34] STAT：Ego, ambition, and turmoil: Inside one of biotech’s most secretive startups https://www.statnews.com/2016/09/13/moderna-therapeutics-biotech-mrna/

[35] Annual Lobbying by Moderna Inc https://www.opensecrets.org/federal-lobbying/clients/summary?cycle=2021&id=D000073555