COVID-19 Vaccine Car Crash | Seeking Alpha

News in the past week has not been encouraging that COVID-19 vaccine development is on track. In fact, claims by President Trump about the likely end of the pandemic seem quaintly like groundhog day as he made a similar claim back in early April when the number of US COVID-19 deaths was just 9,619. On September 18, US COVID deaths reached 203,171. Understanding the current situation is vital not just for investors in the COVID-19 space, but also more generally as the economic shutdowns around the world are creating chaos for many industries. Here I update my commentary about COVID-19 vaccine development, because the arrival of a vaccine is being touted as the end of the pandemic. There is as yet no clarity that a safe and effective COVID-19 vaccine will be developed, and even if this does happen, the timeline for it becoming available is unclear. Also how quickly the economy will normalise is not well thought through. Investors need to pay close attention because there is a lot at stake.

The times are so bizarre that it is common now to overlook Presidential missteps and just act as if they didnt happen. Reality is different. People do pay attention. It is clear that President Trump is determined to announce the release of a COVID-19 vaccine before early November, no matter what. What seems not being considered is where this is leading.

Presidential interference keeps coming, the latest being an attack by the President on CDC Director Robert Redfield who stated clearly at a Senate hearing that his view was that a vaccine might not become available to the general public until the second half of 2021. Perhaps without thinking, he baited the President by making the statement that wearing a mask is perhaps more important than a vaccine because a mask protects whereas a vaccine will not be effective for all people. Trump responded, after hearing the testimony, that the information was incorrect about vaccine distribution and reference to the value of masks as a mistake. The CDC backed off in response to the Presidents attack, but later retracted the backoff, which had clearly been an attempt to appease the political attack.

The extraordinary thing about the above exchange on the timing of vaccine (if one gets Phase 3 approval) release and value of masks, is that some press is seeking to blame the CDCs messaging, which is clearly all over the place due to factual reporting having to cope with pushback and accusation of lying by the President.

The point is that the public understands what is going on. Vaccines need public acceptance and support or they cant be effective (even if they are proved to be safe and efficacious). A recent poll makes clear that public support for a COVID-19 vaccine is wavering. In April, 72% of US adults said they would get a COVID-19 vaccine when available. This has fallen 21 points to 51% today, with a significant part of this fall (8%) happening in the past month as the independence of the FDA from political interference has become a headline issue. This fall in intention is similar for both Republicans and Democrats. Another poll has just 39% of respondents saying that they would get a Government approved COVID-19 vaccine, with 23% saying no and 36% unsure.

The above numbers are not enough to achieve successful population-wide protection even based on a very effective vaccine.

There is huge pressure on the Phase 3 COVID-19 vaccine trials because everyone wants the world economy to resume and also because there are fortunes to be made from a successful vaccine, notwithstanding that the work has been significantly funded by the public purse for some companies (e.g., Moderna, (NASDAQ:MRNA)). There is also a Presidential candidate seeking political gain.

The above makes for a really unhelpful environment in which to conduct really complex work, that is made much more problematic by cutting corners on the Phase 1 & 2 trials. Usually a vaccine candidate gets into Phase 3 with a lot of background work done and hence some confidence about its efficacy and safety. While there seem to be indications of efficacy (although still too early to be clear about this) the safety profiles for the candidate vaccines are very limited going into the Phase 3 trials.

Some parties see the AZD1222 Phase 3 trial as a formality that needs to be pushed through regardless. This isnt surprising when the earlier stages have been rushed through, scale-up is already well advanced, planning for public release advanced and formal agreements concluded about vaccine delivery in many markets. To some this all means that the vaccine projects are now in a tedious formal approvals process that is wasting time.

The reality is different as the AZD1222 trials were paused recently because of a serious adverse event in the UK section of the trial.

There are many details about the trials that need close attention. Even a lay person can get a sense of this by looking closely at details of the trials. For example, with the AstraZeneca/Oxford Phase 3 trial(s), the start was for 30,000 volunteers in the UK, Brazil and South Africa. Enrolment for these 30,000 volunteers continued the criteria used in earlier trials. Only healthy 18-55 years old were eligible. This is the cohort that produced the pause because at least one (and possibly more, see below) adverse events occurred which required examination. There is another major cohort in the Phase 3 examination of the AstraZeneca vaccine in the US which involves a further 30,000 volunteers. The enrolment criteria for these volunteers is broader, encompassing people with possible immune system dysfunction. So this is a more risky cohort.

The UK, Brazilian and South African sections of the Phase 3 trial have been resumed (with 18,000 individuals vaccinated so far although it isnt clear whether all 18,000 have yet received the second dose), while the US Phase 3 trial (involving a more at risk cohort) remains paused. Here is the cohort included in the US trial : US are recruiting up to 30,000 adults aged 18 years or over from diverse ethnic and geographic groups who are healthy or have stable underlying medical conditions, including those living with HIV, and who are at increased risk of infection from the SARS-CoV-2 virus. Centres outside the US are included based on predicted transmission rates of the virus and sites in Peru and Chile are planned to initiate recruitment shortly.

Whether the reason for the pause in the Phase 3 trial continuing in the US is just slow bureaucracy in the US, lack of sufficient information to make a decision to restart the trial, or it reflects a concern about this population being more at risk remains to be seen. It does seem that there might be more to the story than just tardiness by the FDA, as a report indicates that NIH leaders at the highest level are very concerned and AstraZeneca might be being viewed as less than forthcoming with needed information. Of significant importance to the US, the vaccine needs to be safe for the obese and those with type 2 diabetes. Dr. Ezekiel Emanuel Vice-Provost for Global Initiatives at the University of Pennsylvania claims that up to 40% of the US population have existing health conditions that would qualify them for priority vaccination. Is this large group included in safety considerations yet?

Details, details: Regarding the pause in the trial, in the absence of clear statements information leaks out piecemeal, which either exaggerates problems or possibly hides issues that need to be faced. My reading of various initial reports, that claim to be sourced from people familiar with the UK trial, suggests that there may have been 2 or even 3 adverse events that required scrutiny. The first which one report said led to a brief pause that seems not to have been reported, may have involved a person who was diagnosed with MS after receiving the vaccine (or placebo). This seems to have been quickly dismissed as not being vaccine-related. The second report which led to the publicised pause was due to a neurological condition, which seems to have been reported as (and also disputed) to be transverse myelitis. Then there is another report which suggests that there might be two such events (or is this referring to the earlier MS diagnosis?).

A more recent CNN report based on an internal safety report from AstraZeneca (dated September 10 and sent to doctors running the trial on September 11) states that a previously healthy 37-year-old woman experienced confirmed transverse myelitis 14 days after receiving the second dose of the vaccine (initial dose early June, second dose late August). The report states that she tripped on September 2 while running, and the next day she had difficulty walking, weakness in her arms, pain and reduced sensation in her torso, headache and reduced ability to use her hands. She was hospitalised on September 5. The report stated in 2 places that the patient had a confirmed diagnosis of transverse myelitis. The patient had no prior history of neurological symptoms or significant illnesses. The patient began to recover quickly and after 4 days her symptoms were improving.

I noted in a previous article (which included comments on the AstraZeneca/Oxford vaccine) that my reading of the Phase I/II trial results for AZD1222 was that only 10 of 1,077 healthy volunteers had received a second dose of the vaccine. This could mean that the basis for the Phase 3 trial (2 doses) was based on results from 10 healthy volunteers. If this is the case, there are reasons to be quite cautious about the report of a serious adverse event as a result of the second dose.

Of even more concern is that the CNN report of the internal AstraZeneca safety report, refers to volunteers in the trial who "developed unexplained neurological symptoms including changed sensation or limb weakness." Quoting the CNN report again: The document goes on to say that "after independent review, these illnesses were either considered unlikely to be associated with the vaccine or there was insufficient evidence to say for certain that the illnesses were or were not related to the vaccine."

So the CNN report clearly indicates that the AstraZeneca report is referring to more than one adverse event involving neurological symptoms. Perhaps the 37-year-old woman is the only person who was hospitalised?

Clearly, there is huge reluctance (in part because of massive political interference) to suggest that there might be a problem with the vaccine. On the other hand, vaccines have to be REALLY safe to be administered to millions of people, many of whom are far from being in good health. The Oxford University site concerning the vaccine trial does not mention the nature of the adverse event. Given the need for public confidence, it isnt clear to me that AstraZeneca and Oxford University hiding behind medical confidentiality is useful.

The confronting point is that the vaccine used in the Phase 3 trial has already been scaled up and is being manufactured. Of course, this never happens in normal vaccine development, because only after safety and effectiveness have been established does a finished version of the vaccine get scaled up. One can see why there is huge resistance to acknowledging that there might be a problem.

The pharmaceutical industry is alert to the problem of community distrust and the CEOs of 9 major companies with leading vaccine candidates (including Pfizer, BioNTech (NASDAQ:BNTX), AstraZeneca and Moderna) have already stated that any decision about seeking approval (especially in relation to safety and efficacy) will be based on science and not politics.

Yesterday, acknowledging the seriousness of the situation, Pfizer and Moderna announced further that they would release information about the Phase 3 trial protocols early to provide transparency. Perhaps they have come forward because, in addition to the COVID-19 vaccine being the first coronavirus vaccine, the Pfizer/BioNTech and Moderna programs are using mRNA technology that has not been used in a vaccine before. AstraZeneca also indicated that it would also release protocols for its Phase 3 trial.

Modernas Phase 3 trial involves 2 doses a month apart and enrolment of 30,000 adults. Inclusion criteria for the trial include participants at high risk of SARS-CoV-2 infection (appreciable risk of exposure to the virus) who are healthy or with pre-existing conditions that are stable. Exclusions include those who are ill at the time of the first dose, and those with HIV that is not well controlled. The Moderna website states that 25,296 individuals have already enrolled, with 10,025 participants having received their second injection. The trial conditions have recently been updated slightly and a detailed protocol now published.

Details as to how efficacy will be determined have been given by Pfizer and Moderna. Basically this involves reviewing emergence of COVID-19 cases in treatment versus control (placebo) volunteers. The FDA requires 50% success of a vaccine for it to be called efficacious. While Pfizer is being a bit vague about timing of readouts, Moderna is thinking that readout should be reported by end of year or early next year.

It is not yet clear how AstraZeneca, Pfizer or Moderna plan to be more transparent about adverse events.

This report has more technical detail than is normal for a Seeking Alpha article, but the subject matter is of such critical importance to investors that I think these matters need to be raised. Whether or not a vaccine gets developed and if so when it can be released is vital information as a lot rests on these issues.

My take at the moment remains that we dont have sufficient information to know if it will be possible to develop a safe and effective COVID-19 vaccine. If this proves possible, when such a vaccine might become generally available is also unclear, although it is almost certain that the second half of 2021 is the earliest it might become available, unless safety is disregarded and an unvalidated vaccine just gets pushed out. Even if this happens, I suspect the public will be cautious and not enough people will accept it to make it effective. I suspect that the vaccine developers know that they must re-establish public confidence in the vaccine development process, and Pfizer and Moderna have made a start. AstraZeneca says it will, but currently there are unanswered questions about the seriousness of the adverse event(s) and indeed how many there have been might be in question.

It might be that CDC Director Robert Redfields comment that a mask is a safer option could be what we have to hold on to in 2021 and even beyond (subject to effective treatments and preventatives becoming available to provide further protection). Social distancing, lockdowns, lots of testing and contract tracing with quarantine may have to be accepted. Australia (837 deaths) has just been through a recent outbreak in Victoria which it seems to have controlled through a strict lockdown. The alternative for the US if this is unacceptable may be coping with an ever-rising death toll (which was 203,171 on September 18). Investors waiting to see who will win the COVID-19 vaccine race (if there is going to be a winner) need to be patient and hope that the public gets more confident about the process.

I am not a financial advisor, but I have a background in biotech both from a technical and also investor perspective. If my commentary helps you and your financial advisor to think about the impact of the COVID-19 pandemic on your overall investment strategy and whether you want to invest in companies involved with the COVID-19 pandemic, 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.

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COVID-19 Vaccine Car Crash | Seeking Alpha