Indian Billionaires Bet Big on Head Start in Coronavirus Vaccine Race



PUNE, India — In early May, an extremely well-sealed steel box arrived at the cold room of the Serum Institute of India, the world’s largest vaccine maker.

Inside, packed in dry ice, sat a tiny 1-milliliter vial from Oxford, England, containing the cellular material for one of the world’s most promising coronavirus vaccines.

Scientists in white lab coats brought the vial to Building 14, carefully poured the contents into a flask, added a medium of vitamins and sugar and began growing billions of cells. Thus began one of the biggest gambles yet in the quest to find the vaccine that will bring the world’s Covid-19 nightmare to an end.

The Serum Institute, which is exclusively controlled by a small and fabulously rich Indian family and started out years ago as a horse farm, is doing what a few other companies in the race for a vaccine are doing: mass-producing hundreds of millions of doses of a vaccine candidate that is still in trials and might not even work.

With the coronavirus pandemic turning the world upside down and all hopes pinned on a vaccine, the Serum Institute finds itself in the middle of an extremely competitive and murky endeavor. To get the vaccine out as soon as possible, vaccine developers say they need Serum’s mammoth assembly lines — each year, it churns out 1.5 billion doses of other vaccines, mostly for poor countries, more than any other company.

The idea is to conduct these two processes simultaneously and start production now, while the vaccines are still in trials, so that as soon as the trials are finished — at best within the next six months, though no one really knows — vaccine doses will be on hand, ready for a world desperate to protect itself.

American and European governments have committed billions of dollars to this effort, cutting deals with pharmaceutical giants such as Johnson & Johnson, Pfizer, Sanofi and AstraZeneca to speed up the development and production of select vaccine candidates in exchange for hundreds of millions doses.

AstraZeneca is the lead partner with the Oxford scientists, and it has signed government contracts worth more than $1 billion to manufacture the vaccine for Europe, the United States and other markets. But it has allowed the Serum Institute to produce it as well. The difference, Mr. Poonawalla said, is that his company is shouldering the cost of production on its own.

But Serum is distinct from all other major vaccine producers in an important way. Like many highly successful Indian businesses, it is family-run. It can make decisions quickly and take big risks, like the one it’s about to, which could cost the family hundreds of millions of dollars.

Mr. Poonawalla said he was “70 to 80 percent” sure the Oxford vaccine would work.

But, he added, “I hope we don’t go in too deep.”

Unbeholden to shareholders, the Serum Institute is steered by only two men: Mr. Poonawalla and his father, Cyrus, a horse breeder turned billionaire.

More than 50 years ago, the Serum Institute began as a shed on the family’s thoroughbred horse farm. The elder Poonawalla realized that instead of donating horses to a vaccine laboratory that needed horse serum — one way of producing vaccines is to inject horses with small amounts of toxins and then extract their antibody-rich blood serum — he could process the serum and make the vaccines himself.

He started with tetanus in 1967. Then snake bite antidotes. Then shots for tuberculosis, hepatitis, polio and the flu. From his stud farm in the fertile and pleasantly humid town of Pune, Mr. Poonawalla built a vaccine empire, and a staggering fortune.

Capitalizing on India’s combination of cheap labor and advanced technology, the Serum Institute won contracts from Unicef, the Pan American Health Organization and scores of countries, many of them poor, to supply low-cost vaccines. The Poonawallas have now entered the pantheon of India’s richest families, worth more than $5 billion.

Horses are still everywhere. Live ones trot around emerald paddocks, topiary ones guard the front gates, and fancy glass ornaments frozen in mid-strut stand on the tabletop of Serum’s baronial boardroom overlooking its industrial park, where 5,000 people work.

Inside the facility producing the coronavirus vaccine candidate, white-hooded scientists monitor the vital signs of the bioreactors, huge stainless steel vats where the vaccine’s cellular material is reproduced. Visitors are not allowed inside but can peer through double-paned glass.

“These cells are very delicate,” said Santosh Narwade, a Serum scientist. “We have to take care with oxygen levels and mixing speed or the cells get ruptured.”

His voice was jumpy with excitement.

“We all feel like we’re giving the solution to our nation and our world,” he said.

Initial trial results of the Oxford-designed vaccine showed that it activated antibody levels similar to those seen in recovering Covid-19 patients, which was considered very good news.

Serum has already produced millions of doses of this vaccine for research and development, including large batches for the ongoing trials. By the time the trials finish, expected around November, Serum plans to have stockpiled 300 million doses for commercial use.

But even if this vaccine fails to win the race, the Serum Institute will still be instrumental. It has teamed up with other vaccine designers, at earlier stages of development, to manufacture four other vaccines, though those are not being mass produced yet.

And if all of those fail, Mr. Poonawalla says he can quickly adapt his assembly lines to manufacture whatever vaccine candidate does work, wherever it comes from.

“Very few people can produce it at this cost, this scale and this speed,” he said.

Under the AstraZeneca deal, Serum can make 1 billion doses of the Oxford vaccine for India and lower- and middle-income countries during the pandemic and charge an amount that is no more than its production costs.

After the pandemic passes, Mr. Poonawalla expects that he will be able to sell the vaccine at a profit — if it works — but his biggest concern is the near term and covering his cash flow. He estimates that he is spending around $450 million to mass-produce the Oxford vaccine.

But any deal will probably be far smaller than what the big pharmaceutical companies have landed. Another difference is that those companies are vaccine developers and producers. Serum’s role, at least for the Oxford vaccine, is purely production.

Mr. Poonawalla senses this is about to change.

He is confident that the Oxford vaccine his gleaming stainless-steel machines are churning out has the best shot of working. If it does, he plans to roll up his sleeve and brace for an injection.

“It would be ridiculous,” he said, “if I spent all this money, committed to everything, and I didn’t take it myself.”

Kai Schultz contributed reporting from New Delhi.



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