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A shot in the arm for infectious diseases.

Julia Angeles, Investment Manager Maria Souza, Impact and Investment Analyst
What's next for vaccines? Infectious diseases remain an unmet need that Moderna has its sights set on.

The value of an investment, and any income from it can fall as well as rise and investors may not get back the amount invested. Past performance is not a guide to future returns.

 

We have never been more aware of how vitally important vaccines are for global health and development. Prior to Covid-19, the vaccine market accounted for approximately three per cent of the total pharma market. This will surely rise for a number of reasons. Vaccines are considered the cornerstone of an efficient healthcare system. Not only are they the best tool available to control and eradicate infectious diseases, but they have the potential to make a major contribution to the control and prevention of antimicrobial resistance1. Promoting higher immunisation rates means that needed focus is being placed in prevention of diseases. By decreasing the incidence of infectious diseases and associated mortality, vaccines are also highly cost-saving. A US study estimated that every dollar spent on childhood vaccination could save $3 from a payer perspective and $10 from a societal perspective.

Vaccine coverage

Immunisation programmes save millions of lives every year, with more than 20 life-threatening diseases able to be prevented by immunisation2. For example, between 2010 and 2018, an estimated 23.2 million deaths3 were averted globally thanks to the measles vaccine. Over the past decade, more than 100 countries consistently introduced new vaccines to their programmes. In 2019, a record number of infants – 86 per cent globally – received a vaccination, more than 116 million.

However, this still leaves millions of infants that do not receive a full course of even basic vaccines, and many more missing out on newer vaccines. The World Health Organisation (WHO) and UNICEF estimated that in 2019, 13.6 million children did not receive any vaccines through immunisation programmes – known as the ‘zero dose’ children. In 2020, this number increased to 17.1 million4.

Progress on developing new vaccines has been mixed. We have vaccines to protect against malaria, dengue and Ebola virus disease; there are promising vaccines against respiratory syncytial virus, tuberculosis, and vaccines for all strains of influenza are in the pipeline. Yet, the treatment and prevention of infectious diseases remain unmet needs. Over the past 40 years, we have identified 80 plus new viruses, but managed to develop only three vaccines against these new viruses. The only infectious disease in humans to have been eradicated, globally, is smallpox5. Other diseases are showing that they could easily flare up again. The strife-ridden Democratic Republic of the Congo is harbouring more than Ebola. There is also a measles outbreak, and a circulating strain of polio that mutated from the live, weakened one in the oral vaccine6. The recent pandemic serves as a reminder of how fragile the world is in the face of a highly contagious and deadly virus.

WATCH: Overview by investment manager Julia Angeles

New technologies, renewed hope

There are reasons to hope that this could change. There are two major factors to the sluggish progress made over the past few decades. First, the lack of adequate technologies to address the complex nature of viruses and, second, the lack of focus on the low-income countries. These have a significantly higher burden of infectious diseases compared to high-income countries (due to social determinants of health and economic incentives). It is also worth mentioning that some populations – often the poorest, the most marginalised and the most vulnerable, in fragile, conflict-torn settings – have poor access to immunisation services. In 2020, the countries supported by the Vaccine Alliance (Gavi) saw a significant decline in vaccine coverage, back to their 2014 levels[7]. Thus highlighting that previous gains in vaccine coverage remain fragile and are not yet as resilient to programme shocks as those in countries with longstanding strengths in immunisation programmes.

Things are changing. On the first point, we have a suite of new technologies that are well-positioned to address the limitations of the old technologies. Messenger RNA (mRNA) is one of the leading technologies with a high chance of transforming the disease-prevention (prophylactic) vaccine space. They are a safe and effective way of teaching our cells how to make a protein to trigger an immune response. Second, Covid-19 has been a strong reminder of the global nature of infectious diseases. As the world is becoming ever more connected, the developed countries can no longer ignore what is happening in any region around the world.

Rethinking our approach to infectious diseases

We desperately need to rethink our approach to infectious diseases. There are several areas where new thinking and investments are required (the list is not exhaustive):

  1. Infrastructure – the right infrastructure will help us fight future pandemics much faster. Assuming that we have a solid scientific foundation to develop effective and safe vaccines, then infrastructure will need to be on both the regulatory and physical sides to ensure the speedy approval and scaling up of manufacturing and administration of vaccines.

  2. Inequality – action is required to close the inequality gap in accessing vaccines in both developed and developing countries. The benefits of immunisation are unevenly shared and coverage varies widely, not only among countries but also within them. In the developed countries, social factors still play an important role in driving the access to life-saving treatments. In the developing countries, we need to create a new model that will provide the incentives to develop vaccines/treatment for those diseases that mainly impact low-income countries.

  3. Research and development – new technologies should be applied to develop vaccines against diseases that were hard to address in the past, for example, cytomegalovirus (CMV), the leading viral cause of birth defects, and human immunodeficiency virus (HIV).

  4. Biology of viruses and general impact on health – we must continue investing in expanding our understanding of how different viruses impact our health. There are range of viruses that have no symptoms but can cause other life-threatening diseases over time, such as the human papillomavirus (HPV) that over time could lead to the development of cervical cancer. There is also a possible link between viruses and longevity. One study demonstrated that people without CMV lived on average five years longer than infected people. So, vaccines might both protect us from immediate danger of pathogens and also have a positive impact on our lifespan.

  5. Public education – as the second strategic priority in the WHO’s Immunisation Agenda 2030, increasing the public’s knowledge and understanding of vaccines is key: we need to support governmental commitment to include the topic of immunisation in education curricula, formulate public education tools (including to meet the needs of vulnerable and marginalised groups), provide educational opportunities for the health workforce, and prepare information resources for advocacy groups.

Moderna’s role in driving radical change

We believe that Moderna could be one of the best-placed companies to drive radical change in how we approach infectious diseases. There are several reasons for this.

Experience and vision

The first is the company’s bold vision and ability to execute. Before starting to develop its Covid-19 vaccine, Moderna already had seven prophylactic vaccines and two cancer vaccines at different stages of development. The most advanced programme was CMV. The success of Covid-19 has helped to significantly de-risk the entire prophylactic vaccine franchise and now the company is well-positioned to accelerate the growth of new programmes.

While the number of programmes is encouraging, what is truly exciting is the steps the company is taking towards helping countries to develop strategies against future pandemics. The company has recently announced a collaboration with the Government of Canada to build a manufacturing facility in Canada. The collaboration is aimed at providing access to domestically manufactured vaccines against respiratory viruses and to provide direct access to rapid pandemic response capabilities. Importantly, the company has received funding from the Defense Advanced Research Project (DARPA) to develop a mobile, end-to-end automated manufacturing platform capable of producing hundreds of doses of vaccines in a matter of days.

Addressing complexity

Second, mRNA allows to address important challenges of developing effective vaccines against known pathogens and Moderna is the leading player within mRNA. For several decades, scientists have failed to come up with an effective vaccine against CMV because of the virus’ complex structure. The advent of mRNA technology means it is now possible to address and overcome that complexity. In addition, Moderna can also combine different pathogens in one vaccine. This could be truly disruptive to the market as it could protect people from a variety of respiratory diseases with just one shot.

Valuing social responsibility

The third reason to like Moderna and to believe in what it can achieve is that it is serious about social responsibility. The company is making some encouraging steps towards promoting public health all around the world. It has recently launched a $50m foundation to support charitable organisations that promote public health, particularly in underserved populations. Of course, this might still be a drop in the ocean and it is more important to see whether the company could contribute directly to the infrastructure development in the developing countries by, for example, building a manufacturing facility and make these countries self-sufficient.

This snippet from Moderna’s press release brings to life the company’s thinking about social responsibility:

‘Moderna is committed to making corporate responsibility a critical part of who we are and what we do with a sense of purpose,” said Stéphane Bancel, Moderna’s Chief Executive Officer. “We need to embed that sense of corporate responsibility as we commercialise the company, to make sure it is part of our DNA, our culture, forever as we scale. We are passionate about being an active contributor to the communities where we live and work, as well as to global communities impacted by Covid-19 and other diseases. Our recent commitment to provide up to half a billion doses of our vaccine to lower- and middle-income countries through COVAX was a key step in this direction. Now, with the establishment of the Moderna Charitable Foundation, we aspire to make a continuing positive impact – in the decades to come – as we work relentlessly to deliver on our mission for patients.'

With a bold vision, the ability to deliver through cutting-edge mRNA technology, and a keen awareness of its social responsibility, it is exciting to imagine the role Moderna might play in safeguarding the world against future pandemics.

1. Leveraging Vaccines to Reduce Antibiotic Use and Prevent Antimicrobial Resistance. WHO, January 2021
2. Immunization Agenda 2030 – A global strategy to leave no one behind. WHO, April 2020
3. Progress Toward Regional Measles Elimination – Worldwide, 2000-2018 – PubMed (nih.gov)
4. Progress and Challenges with Sustaining and Advancing Immunisation Coverage During the COVID-19 Pandemic
5. Eradication of Diseases – Our World in Data
6. How pandemics shape social evolution. Nature, October 2019
7. Progress and Challenges with Sustaining and Advancing Immunisation Coverage During the COVID-19 Pandemic

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The views expressed in this article are those of Julia Angeles and Maria Souza and should not be considered as advice or a recommendation to buy, sell or hold a particular investment. They reflect personal opinion and should not be taken as statements of fact nor should any reliance be placed on them when making investment decisions.

This communication was produced and approved in October 2021 and has not been updated subsequently. It represents views held at the time of writing and may not reflect current thinking.

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Authors

Julia Angeles

Investment Manager

Julia joined Baillie Gifford in 2008 and is the Portfolio Manager of the Health Innovation Strategy. Prior to Baillie Gifford, Julia worked as a management consultant for McKinsey & Co advising firms in Denmark, Russia and Hungary. Since joining Baillie Gifford Julia has worked on a number of regional and global investment strategies. Julia has a passion for the transformation taking place in healthcare, and it was this passion which led to the establishment of the strategy. She believes that over the next 10 years healthcare systems around the world will experience a monumental change and we will witness a move away from reactive medicine to a world where prevention and cure will become an integral part of healthcare driven by technology. Julia is also a member of the International Growth portfolio construction group. Julia obtained a BSc in 1999, MSc in 2001 and PhD in 2005 in Economics from the University of Aarhus, Denmark and speaks fluent Russian and Danish.

Maria Souza

Impact and Investment Analyst

Maria joined Baillie Gifford in 2021 and is an Impact and Investment Analyst in the Health Innovation Strategy. Prior to Baillie Gifford, she worked as a project manager with UN Agencies in the US (mainly UNICEF) and was focused on Water, Sanitation and Hygiene and Health Sections. Maria also spent time as the Senior Biologist at the Brazilian branch of Engie-Tractebel Engineering, coordinating water quality, and sanitation work of building sites in the Brazilian Amazon Forest. Maria is a qualified Biologist and obtained MSc in Ecology, Conservation and Management of Wildlife in 2005, from the Federal University of Minas Gerais (UFMG), Brazil. For most of her career, Maria has focused on developing frameworks that better assess the social and ecological impact of human activity on the natural environment. There are many lessons nature teaches us about change in complex systems, but the ones she focuses on are: effecting and sustaining change, disrupting or building resilience (depending on one’s aims), recognizing catastrophic shifts, and optimizing knowledge transfer.

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