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2/23/22 Serum Institute CEO details the state of global COVID-19 vaccine distribution
Video Transcript

ANJALEE KHEMLANI: Joining me now, CEO of Serum Institute of India, Adar Poonawalla. Adar, thank you so much for joining me today.

https://finance.yahoo.com/video/serum-institute-ceo-details-state-231355016.html

ADAR POONAWALLA: It's a pleasure to be here with you.

ANJALEE KHEMLANI: I want to start off with, obviously, looking at where we are right now in the world. We know that two years into this pandemic, we find ourselves sort of in a situation of a tale of two worlds, right, where there is a very heavily vaccinated half of the world and an under-vaccinated half as well. We seem to be at a crossroads, with some experts like Bill Gates specifically saying recently that it's, quote, "too late" to reach the World Health Organization 70% vaccination goal for the world and saying that, quote, "demand does not exist for that."

ADAR POONAWALLA: Well, you know, it's a funny predicament we find ourselves in because if you just rewind about six months to a year ago, there was this huge global shortage of vaccines-- or let's put it this way, WHO-approved, good, quality effective vaccines in the world. So as we saw that shortage sort of dissipate because you had a lot of vaccine supply coming out of even India and other parts of the world to the poorer nations-- to answer your question on vaccine equity and all of that-- we find ourselves at a point where the hesitancy, combined with the ability for countries, certain nations, to absorb the vaccine in their programs and actually administer it, getting the jabs into everyone's arms, is a challenge.

So when you see both these factors playing out, 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. And you know, I don't blame them. We've all gone through hell.

So you've got that being an issue for the second dose and even booster doses. You've got, as I said, certain nations who just don't have the infrastructure, the cold chain capacity, other factors that are preventing those vaccines, which are now available in abundance. For example, we've got $400 million doses of stock of vaccine. I mean, that would have been crazy if we had that, you know, six months ago and very useful.

But sadly, we could only make a billion and a half doses, which was, of course, a lot more than what we had promised. And that still wasn't enough in 2021. But now in 2022, we're you know, fortunately, in a very, very good place.

ANJALEE KHEMLANI: Yeah, I want to talk about that. I know by late December, you were putting out about 250 million doses a month. And you warned that you would have to production just based on the demand. Knowing that right now there is still demand in the world, and we've seen India restart on a booster campaign-- to your point, there is still some unmet need. Where is your monthly output right now for the AstraZeneca Oxford vaccine, as well as where you're starting now for Novavax?

ADAR POONAWALLA: So we've got millions of doses on Novavax stockpiled, and we're starting exports now to Europe and many other countries now that you know it's approved. I, in fact, stopped the AstraZeneca vaccine production in December, because I had a stock of $400 million doses in addition to the 1.5 billion that we delivered to 70 countries, along with, you know, India being the major country receiving the supply of that vaccine.

So I had to actually make an emotional decision to shut down or pause the production, which can restart with a month's notice. We've got those facilities ready. But there's no point making anymore because we've got, as I said, a very large stockpile available. And I do see in quarter two and quarter three, let me just add, the vaccine demand picking up.

So to what you mentioned, to Bill Gates' point, it's right what he says. But I think hopefully, you know, demand will build up a little bit as the certain nations that haven't been able to absorb the huge quantities of vaccines pouring in from the United States, from India, and other parts of the world-- so let's see how that goes.

ANJALEE KHEMLANI: Where do you see that demand coming from? Because, to your point, there is hesitancy in part because of the uneven supply, especially when you talk about African countries-- you faced several setbacks, one with the fire last January, as well as the export ban. So where do you see this demand coming from, then?

ADAR POONAWALLA: Yes. I mean, we weren't set back a lot with the fire because we had multiple facilities. The reason we couldn't export is because we had an export ban, or temporary pause because we had to take care of our nation first, which is what all the other countries were also doing. Remember in Europe and in the US, until their populations were vaccinated, you couldn't have vaccines going even between Europe and the UK. There was an issue with the AstraZeneca vaccine being allowed to go from Europe to the UK.

So it was a universal kind of issue where the politicians and leaders decided to take care of their nation first, which was their primary responsibility. And as soon as we could then export, we did export. So now, you know, it's a free for all. We can export to any country that we want. And as I said, as these countries and nations pick up-- like, take, for example, the African continent.

You still haven't crossed a 40%, 50% vaccination coverage rate. I imagine that will happen in the second or third quarter of this year, because vaccine supply is no longer a constraint. It's just getting the vaccine out to every part of the country. And all these countries have vast geographical challenges as well with cold chains and other things to get the product out to everyone.

ANJALEE KHEMLANI: Do you feel like you lost an opportunity when it comes to those months with the export ban in place? I know you've talked about having had lowered the price as well as the potential loss of greater profits than you could have. Do you feel like you miss an opportunity to really build up that capital to then reinvest, considering some of the US companies, Western companies really got a windfall from this pandemic?

ADAR POONAWALLA: Well, you know, I think a lot of the pharmaceutical companies, including Serum Institute, has got a windfall because of the volumes and the crisis that we were handling. And don't forget, we were providing this vaccine, and still are, at $3 a dose. So compared to all the other vaccines that were available, even the Chinese and Russian ones, forget the American vaccines, which were going at $20-- even the Chinese and Russians were selling at $10.

So you know, we've always ethically priced our vaccines to make them as affordable and accessible to the poorer nations. And yes, it was a blow to our reputation, which we're slowly clawing back because, you know, even the African continent is aware that we've always been there to support them for the last two, three decades, providing so many vaccines at affordable prices compared to what was available from Western pharmaceutical companies. And it's because, you know, our cost base has always been lower.

So we were able to provide these vaccines at a lower price. 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.

ANJALEE KHEMLANI: I want to talk about the vaccine specifically. I know you've done Oxford AstraZeneca, also Novavax, also looking at Sputnik. But there is definitely a push, especially in South Africa, to build up for mRNA hubs and the like. Do you see the opportunity there? And are you planning to invest in building out for mRNA, either for this pandemic or future ones?

ADAR POONAWALLA: Well, you know, as you know, this sort of thing is a very specialized activity. It'll take a lot of time. I don't know if we'll ever set up a facility on the African continent. Maybe Ghana and Rwanda are two countries that we're looking at-- maybe not South Africa-- maybe even South Africa, but you've got great companies in South Africa that can make vaccines as well.

I think as time goes on, we'll see our investment in messenger RNA first proving itself in India, and then maybe, you know, we expand in other countries. But don't forget, all the countries that took the messenger RNA vaccines have shown a decline in immunity. We've seen that across the board.

If you look at India and the level of cases and hospitalizations, which have predominantly taken 88% of India's vaccinated the Oxford-AstraZeneca vaccine, you've seen one-fifth of the hospitalizations and severity of disease even just with two doses. I mean, don't forget we've not boosted our population like some of the other nations have Germany, United States, so many other countries.

So I'm actually a big fan of the traditional technology and vaccines in terms of their ability to protect for the long-term and also reduce severity of disease. So I'm still not sold and convinced on messenger RNA, although I'm not ruling it out. We've made investments in that technology. And maybe in two years, we're looking at leveraging that platform to make some vaccines.

But at the moment, I'm still not convinced whether messenger RNA technologies are the best way to provide long-term effectiveness. In the short-term, they're very powerful. They're very safe and good. But, you know, we're just waiting to see that real world data come out.

ANJALEE KHEMLANI: You've also diversified throughout the pandemic. I know you've had a lot of things going on. But one of the things that you've done is made sure that you have the capacity to produce your own glass viles and syringes as well-- as well as COVID tests. So where do you see the long term play for this? Is this just for the pandemic and also for future pandemics? Or is there another way to leverage this new investment?

ADAR POONAWALLA: Yes. I mean, we bought up to close to 50% in the largest RT, PCR, and rapid antigen test manufacturers called My Labs, and similarly in Shot Guisha, which is the largest glass vile and ample manufacturer in India. So you know, post-pandemic-- and we all knew this would last for a year or two at best-- so post-pandemic, you know, these industries are always piggybacking on the health care systems and the advancements that we have in disease, and monitoring, and genomic sequencing to know what kind of viruses are going around and what kind of strains are circulating.

So I see a tremendous future for the testing part and diagnostics part. And you know, I backed these entrepreneurs who've got and developed various other tests for HPV, for STDs, for so many other things that we'll need beyond COVID. And also, don't forget anyone in the pharmaceutical industry, it's always great to backward integrate.

You know, if I can have more control on my supply chain, that's one thing we learned during this pandemic. And I don't imagine we're going to be in that kind of situation every few years. But it would be great to have some control and say on your own major critical raw materials that you use to fill, package, and manufacture your vaccines or pharmaceutical products. So it was with that in mind that we bought a stake in Shot Guisha as well.

ANJALEE KHEMLANI: Let's move on to you. You specifically have faced unprecedented scrutiny throughout this pandemic, both from being at home and abroad. There was just a lot of conversation about your specific moves. What have you learned from all of this in the past year or two? And what do you think you can apply moving forward?

ADAR POONAWALLA: Well, I mean, you know, it's been an incredible journey, as you rightly put. Every month, there was a new challenge and a new unexpected challenge. So I think whilst dealing with uncertainty the way I've had to personally deal with things, with a lot of public scrutiny as you rightly put, I think one thing we've all learned is don't make forward-looking statements, talk about things when they actually happen rather than talking about, you know-- even when you're pressed and you ask the question, how much do you think you're going to do, or what you're going to do, when are you going to do it-- I think one thing we've all learned is don't make forward-looking statements.

A lot of people talked about when they thought the pandemic would end or subside. I think they regretted their statements. So I think that's one lesson we've all learned, especially when faced with so much uncertainty. I certainly have.

I think the other thing that I learned was how to compartmentalize each issue. Because if I had to think about every night before I go to bed on everything that I have to get done in the next week or month, I would have had a nervous breakdown. So one sort of tool I used was to just focus on one issue at a time or separately, and not think about anything else, and just focus on the task at hand.

So you know, when you've got to act under a lot of pressure, and you have timelines, and you have public scrutiny-- and a lot of responsibility, and rightly so, because everyone needed this, and wanted to know, and depended on us, that we had taken this risk and we were going to be the largest players in supplying the vaccine, it was an incredible responsibility that I felt that I had to succeed and, at any cost, just perform in a timely manner.

And you know, that's what-- I think-- I hope I did my best. And you know, I don't have any regrets on that.

ANJALEE KHEMLANI: Well, speaking of forward-looking statements, what do you see as the outlook for 2022?

ADAR POONAWALLA: Well, I think it's very good, as we discussed. You know, I hope the markets also now recover. And generally, I think everyone is coming to the conclusion that as long as-- and here's the rider-- as long as this strain doesn't mutate to a worse, more severe version, Omicron and, you know, even the B-2 variant and these other variants that are circulating aren't causing a lot of hospitalizations and deaths-- partly because of, you know, the strains becoming weaker and partly, of course, because the vaccines are providing a long term t-cell immune response.

In fact, we've seen a lot of people who haven't had COVID at all, or at least they don't know they've had COVID. And that's partly, you know, because of the long-term t-cell immune response that they've built up over the years. And of course, with the vaccine, we've seen it's much, much better.

In fact, another point was that you know the long COVID that people are suffering from, I think you're half as likely or something like that, I read, was if you took the vaccine versus you getting COVID, and then recovering, and then having long COVID. So if you keep all those factors in mind, it's absolutely important and imperative to get vaccinated.

Having said that, you know, this strain is weakening. And I hope it continues to weaken. So I think the outlook is very good and positive. I think by the end of this year, provided, again, there is no major variant of concern that causes severe disease, I think we're out of it. And I think COVID shots will probably become something like a flu shot where you take an annual booster if you feel, you know, you're in a vulnerable category or you just want to protect yourself. So I imagine it becoming like that.

ANJALEE KHEMLANI: Certainly we'll all be keeping an eye on that. So we'll have to leave it there for now. But again, Adar Poonawalla, CEO of the Serum Institute of India, thank you so much again for joining us. And also a note of congratulations to your father for winning the Padma Bhushan Award.

ADAR POONAWALLA: Thank you so much. Thank you.