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Can AstraZeneca Win in the U.S. COVID Vaccine Market After Its Efficacy Results Fiasco?

By Keith Speights and Brian Orelli, PhD - Updated Apr 1, 2021 at 8:12AM

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The big drugmaker already has a major U.S. supply deal locked up if its vaccine obtains authorization.

AstraZeneca (AZN 1.93%) announced its first interim efficacy results for its COVID-19 vaccine last week. But the National Institutes of Health (NIH) quickly released a statement that seemed to slap the drugmaker's wrist for not including more up-to-date results. In this Motley Fool Live video recorded on March 24, 2021, Motley Fool contributors Keith Speights and Brian Orelli discuss whether or not AstraZeneca's COVID-19 vaccine can still be a winner in the U.S. market after its public relations fiasco. (Note: AstraZeneca subsequently announced updated efficacy results on March 25 after this video was recorded.) 

Keith Speights: I think the best way to describe what's going on with AstraZeneca right now is a public relations fiasco. They came out with results that look great and then were nearly immediately called to the carpet by the NIH. Brian, after all of this, do you think AstraZeneca could still be a big winner in the U.S. COVID vaccine market?

Brian Orelli: They had 100% efficacy at preventing severe diseases and hospitalization. So if it's close to that, probably maybe it's not going to be 100% because they've got more events, so maybe you get one or two in the group that had the vaccine, and so now it's not 100%.

But if it's close to that and they keep their number close to 70%, and they insinuated in the press release that said, "We're going to get the rest of the data out as quickly as possible," that the rest of the data was pretty close to what they had released for the interim. I think it's probably the efficacy is OK.

It can be kept in the refrigerator. So global use, I think that's probably helpful compared to Moderna and Pfizer, which both have to be kept in freezers. I think they have an advantage there.

The big question for long-term use is going to be about the variants. This is an adenovirus-based vaccine, so boosters may not be as effective. There's a hypothesis that the immune system might react to the adenovirus before it can inject cells to deliver the DNA that's required to then express the coronavirus proteins, which is what we want the immune system to actually react to.

So the adenovirus-based vaccines like Johnson & Johnson (JNJ -0.89%) and AstraZeneca are likely to become less useful. The Russian vaccine, I think gets around that, by using two different adenoviruses. The first dose is different than the second dose, it's delivered by a different Adenovirus, and they were able to get really high efficacy there.

Maybe the way AstraZeneca and Johnson & Johnson get around it is by developing a different adenovirus that would deliver the new variant. But again, eventually, you're just going to run out of adenoviruses, I think. I don't know how many there are, but there can't be an endless supply, so maybe they get us a decade's worth, maybe that's enough to deal with the coronavirus.

Speights: Right. I think I read that even with the final data included, the efficacy would probably be between 69% and I think 74%. That's still good enough to win Emergency Use Authorization. It's also important to remember that AstraZeneca has a pretty big supply deal with the U.S. government, I think it's for 300 million doses.

Orelli: Yeah. They're going to sell those regardless. 

Speights: Yeah. They're going to sell those regardless.

Orelli: Yeah. Most of those are probably actually going to end up in other countries because of this, by the time that AstraZeneca gets its Emergency Use Authorization in the U.S., we'll have enough of the mRNA-based vaccines that we probably won't actually need AstraZeneca's vaccine.

Speights: Yeah. We're already seeing some countries release some of their AstraZeneca doses to other nations. Yeah, I think you're right, I think we'll see more of that.

Of course, AstraZeneca said they're selling their vaccine at cost, which you would think would build goodwill for the company, but they've kind of flubbed it now, twice at least. I think whatever goodwill they might have received from selling the vaccine at cost might be overwhelmed by some of their PR miscues.

Orelli: Yeah. They also had the issue with the side effects. I don't know if you saw it, but in Monday's release of the interim data, they said that the Data Monitoring Committee specifically looked for thrombosis issues and they saw none. Again, that seems to be just a red herring for the vaccine. It doesn't seem to be an issue.

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