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The world is now firmly in a position of oversupply of vaccines, with a complicated confluence of issues standing in the way of increasing vaccination rates globally.
Adar Poonawalla, CEO of the Serum Institute of India (SII), the world's largest vaccine maker, told Yahoo Finance in a recent interview that he has 400 million doses of the Oxford/AstraZeneca (AZN) vaccine stockpiled with nowhere to go.
"That would have been crazy if we had that six months ago — and very useful," Poonawalla said.
In fact, the company has stopped producing doses until new orders come in — and in which case it would take about a month to restart production, he added.
The company, based in the Indian city of Pune, has played a key role in distributing childhood vaccines to low- and middle-income countries (LMICs) for decades. The company was founded by Adar's father Cyrus Poonawalla, who pivoted the family business from horse breeding to vaccine making.
After taking over in 2011, Adar pushed the company's expansion and has also helped diversify its life sciences portfolio. During the pandemic, the company's visibility surged as a result of the World Health Organization's reliance on it to roll out Oxford/AstraZeneca doses to the world in early 2021.
Despite the setbacks, the company is still playing an important role. After running into manufacturing hurdles in the U.S., Novavax (NVAX) has filed its emergency use authorization for its COVID-19 vaccine using Serum's manufacturing data. SII has the capacity to produce 150 million doses per month of the vaccine.
It is also through SII that Novavax got clearance from the World Health Organization (WHO) and several other countries, including in Europe and Australia, marking a significant milestone for the company. The vaccine, branded Covovax, is also being considered for use in adolescents in India.
Poonawalla attributed some of the recent slowdown in vaccine administration in some parts of the world to COVID fatigue.
"You've got COVID fatigue going on in certain nations, where people don't want to hear anything about vaccines and COVID. They've just had enough. I don't blame them, we've all gone through hell. So you've got that being an issue for second doses and even booster doses," Poonawalla said.
In the U.S., which has yet to authorize Novovax for adults, boosters have been taken by only 47% of the eligible adult population.
But in countries struggling to still get initial doses, local infrastructure barriers exist, Poonawalla said, mirroring what other vaccine companies have said about global shipments.
Some African countries are among these, and experts there have pointed to the lack of consistent vaccine supplies in the past year as a key factor to the slowdown — leaving the populations vulnerable to new variants.
It's why Bill Gates recently said that it is too late to meet the World Health Organization's goal of vaccinating 70% of the world's population by mid-2022.
Gates noted that between the natural immunity from the Omicron wave, plus existing vaccine and booster rates, there is no urgency to meet the 70% goal.
But Poonawalla says there is still a need.
"I do see in Quarter 2 and Quarter 3...the vaccine demand picking up. I think, hopefully, demand will build up a little bit as the nations that haven't been able to absorb the huge quantities of vaccines pouring in...from other parts of the world," he said.
His comments came just a day before reports that the Africa CDC would call for a pause on global vaccine donations until the third or fourth quarter.
Especially on the African continent, where Poonawalla lost market share when India placed an export ban during the Delta wave that devastated the country last spring. For failing to fulfill contracts with African and Latin American countries, SII had to return about $200 million in advances.
In the interim, AstraZeneca doses produced and stockpiled in Europe, as well as mRNA doses from the U.S., have been donated in the past few months. But many doses have been shipped too close to their expiry date, not allowing enough time to distribute. Plus, a lack of cold chain infrastructure presents a problem for some regions.
It's why Poonawalla remains optimistic about AstraZeneca's vaccine shipments for the rest of the year.
"You still haven't crossed a 40%-50% vaccination coverage rate [in Africa]. I imagine that will happen in the second or third quarter of this year," Poonawalla said.
Revenue and reputation
Despite the months-long export ban, the Serum Institute has made out well with the unprecedented volume of orders on a traditionally low-margin product.
"I think a lot of the pharmaceutical companies, including the Serum Institute, got a windfall because of the volumes and crisis we were handling. And don't forget we were providing this vaccine, and still are, at $3 a dose. Compared to all the other vaccines that were available ... we've always ethically priced our vaccines," Poonawalla said.
But he remains cognizant of the damaged relationships with LMICs, which the company has worked with for nearly three decades.
"Yes it was a blow to our reputation, which we are slowly clawing back. Even the African continent is aware, because we've always been there to support them for the last two to three decades providing so many vaccines at affordable prices — compared to what was available from Western pharmaceutical companies — and it's because our cost base has always been lower," Poonawalla said.
"I think very soon you're going to see a lot of the Indian vaccines go to the African continent and restore the faith and original reputation that we enjoyed," he added.
Follow Anjalee on Twitter @AnjKhem