Moderna Is Trying To Get Paid...And So Is Warren Buffett
In the pharmaceutical industry, vaccines are made with the use of the best of technologies and most advanced machinery. The most important component that is used in the production of a vaccine is its production process. The production process has two components - the injection of the vaccine and the storage of the vaccine in the vaccine manufacturing plant.
Vaccine production plants do not require the staff and expertise needed to administer the vaccines. These plants employ a large number of scientists to design and develop vaccines. In addition, they need the expertise and knowledge of pharmacists to administer the vaccines properly. As a result, the staffs employed in these vaccine manufacturing plants are highly trained and highly specialized. The pharmaceutical industry employs many of the personnel and has a large number of staffs, who have expertise in vaccine development and vaccine manufacturing
The cost of the coronavirus vaccine may depend upon the quality of the vaccine being produced, the quality of the staff working for the pharmaceutical manufacturing company, and other factors (such as cost for clinical trials).
Different vaccines can be produced in different sizes, knowing one's manufacturing capacity is crucial. If a vaccine is to be manufactured for children, it may be manufactured in smaller batches in a single pharmaceutical production facility than it would be in a large pharmaceutical manufacturing facility. In fact, if a vaccine was to be manufactured for the elderly, it may be manufactured at a large pharmaceutical facility and then sent to a small pharmaceutical production facility for further processing. The production process for different sizes of vaccines can be quite different.
The types of equipment and tools that are used in vaccine production facility are also of importance. Different types of equipment and tools may be used for the production of vaccines. One of the most important types of equipment used in vaccine manufacturing is the centrifuge. A centrifuge is an essential tool in the production of vaccines. This is because a centrifuge separates the blood from the plasma of the cells. There are various types of centrifuges available in the market. These types include disposable, automated, automatic, battery operated, hand held, and magnetic.
The storage facility in a vaccine manufacturing facility is also important. Different vaccines can be stored in different types of refrigeration. Some vaccines, such as smallpox vaccines, are stored in cryogenic and some are kept at room temperature. The type of storage facility depends upon the type of vaccine and the conditions it needs to maintain.
And I haven't even talked about the R&D cost, which may set you back $500 million. But when it's all set and done an a company has a viable vaccine, after considering the facility ($50-$$700 million), labor (about $25% of production cost), raw materials, overhead, regulatory approval, etc. you are talking at least $1 billion in cost.
Moderna, Inc., a clinical stage biotechnology company, develops therapeutics and vaccines based on messenger RNA for the treatment of infectious diseases, immuno-oncology, rare diseases, and cardiovascular diseases.
Moderna's (NASDAQ:MRNA) CEO Stephane Bancel calls his company's vaccine candidate a "game changer." But he's not talking about the mRNA technology that powers the vaccine. Instead, he's referring to one particular measure of performance in the vaccine's late-stage clinical trial: the ability of the vaccine to prevent severe disease.
Could this element make Moderna's vaccine the market leader? Well, it depends on final results from ongoing analyses of Moderna's late-stage trial. And it also depends on results from other vaccine makers. Let's have a closer look at what we know right now.
In an interview on Fox Business, Bancel said what he was most excited about was the Moderna vaccine candidate's ability to prevent severe cases of COVID-19. Moderna's trial enrolled more than 30,000 participants, each given either a vaccine or a placebo. Initial analysis involved 95 cases of COVID-19. Five occurred in the vaccinated group, and 90 occurred in the placebo group. Importantly, all 11 severe cases of COVID-19 happened in participants given placebo.
Rival Pfizer (NYSE:PFE) and biotech partner BioNTech (NASDAQ:BNTX) reported one severe case of COVID-19 in their vaccinated group. Nine other severe cases occurred in the placebo group. So far, Moderna is ahead in the area of severe disease prevention.
A couple of weeks ago, Moderna announced that its covid 19 vaccine candidate was 94.5% effective, joining Pfizer as the 2nd company to announce their vaccine effectiveness. However, unlike Pfizer, Moderna was the first pharmaceutical firm to conduct human trials of a coronavirus vaccine in the U.S. And despite receiving nearly $1 billion in federal funding Moderna is charging more than any other company to the tune of $75 for those two vaccine doses (about $37/dose). Expensive indeed, even for Americans and I have even started talking about the people in third world countries where some not only struggle from the covid 19 pandemic, but don't know where their next meal will come from..
Earlier this wee, an EU official involved in the talks said the European Commission wanted is talking to Moderna to see if they can supply millions of doses of its vaccine candidate for a price below $25 per dose..good luck with that.
This is why Warren Buffett's Berkshire Hathaway Inc said this past week that he's betting on an industry that will benefit from taking COVID-19 head on. In a regulatory filing Berkshire disclosed $5.7 billion of new healthcare stakes, including more than $1.8 billion each in Abbvie Inc, Bristol-Myers Squibb Co, Merck & Co and $136 million in Pfizer Inc.
Warren and many others are just opportunistic individuals...capitalism at it finest.
This post is my personal opinion. I’m not a financial advisor, this isn't financial advise. Do your own research before making investment decisions.
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