Bloomberg Businessweek - USA (2020-11-02)

47

regularly sell stock,

followingalllawsgov-

erningfinancialtrans-

actions. Emergent’s

shareswereup78%this

yearthroughOct.23.

“It’sa perfectbusiness,”saysEliZupnick,a spokesmanfor

AccountablePharma,oftheOWScompanies.“Theirdown-

sideis coveredbytaxpayers,andtheirupsideis alreadyin

theirpockets.”

After announcing the$628 millionOWS award for

EmergentinJune,PernaandSlaouivisitedthecompany’s

Baltimoremanufacturingfacilitytodelivera messagethat

theentireU.S.militarywasreadytohelpworkoutsupply

chainglitches.“Hehadsaidthateverythingis onthetable,”

Emergent’sHusainrecallsofPerna’smessage.“Everyday

counts,everyhourcounts.”

Somepharmaexecutivesdescribethemilitary’srolein

speedingupvaccinemanufactur-

ingasa genuinebrightspotinthe

federalpandemicresponse.Much

of the work, however, remains

opaque.Ostrowski,Perna’sNo.2,

saysOWSintervenedonbehalfof

suppliersworkingwithModernatoexpediteordersofkey

equipmentandsupplies,buthedidn’tofferanyspecifics.“My

hatgoesofftothesegreatAmericansthatwanttobepartof

thesolutiontothisnationalpandemic,”hesaidinemailed

responsestoBloombergBusinessweek’s questions.Modernais

thelargestrecipientoftaxpayerfunds—atotalof$2.5billion—

toadvanceandsupplyitsvaccine,includinga $300million

milestonepaymentif it’sabletodeliver 100 milliondosesby

Jan.31,2021,underanFDAemergencyuseapprovalorfull

license.Modernasaidina statementthatit interactswithsev-

eralfederalagenciesbutdeclinedtosaywhatsupportit’sget-

ting.Themilestonepaymentdidn’trequirethecompanyto

acceleratetimelinesforitstrials,a spokespersonsays.

Amidwidespreadfearstherewouldbea shortageofkey

materialsfora massvaccinationprogram,OWSsignedcon-

tractstofinancelarge-scalemanufacturingofhundredsof

millionsofvials.CorningInc.secured$204millioninfunds

fromOWSinJunetoexpanditscapacitytoproducespecial-

izedglassvials.ThecompanyhasweeklycallswithOWSand

hasuseda systemundertheDefenseProductionActtogain

prioritywithsuppliers.“It’sbeena helpfultooltomakesure

we’renotgettingstuckinlinebehindanythingthat’snon-

critical,”saysBrendanMosher,Corning’sheadofpharma-

ceuticaltechnologies.“We’redoingthingsatleastthreetimes

fasterthanwewouldhave.”

Noteverycompanyis treatingitsrelationshipwithOWSlike

a militarysecret.SiO2MaterialsScienceofAuburn,Ala.,wona

$143millionawardinJunetoproduce 120 millionplasticvials

witha thinglasscoatingforModerna’svaccineandseveral

othersthatit declinedtodisclose.LawrenceGanti,SiO2’s

presidentofcustomeroperations,saysthecompanyhasused

theDefenseProductionActtosolvemyriadproblemstokeep

productionhumming.Overthesummer,oneofitssuppliers

outsideChicagoshutdownbecauseofa localpoweroutage.

Gantisayshegotthepowercompany’sheadoflegalaffairs

onthephone,gaveherthesupplier’sDefenseProductionAct

letter,andgotthepowerrestoredwithin 45 minutes.“They

understoodthegravityofwhatwewereworkingon,”hesays.

Mangosayshe’sconfidenttheU.S.willbereadytobegin

vaccinatingmillionsofpeoplebytheendoftheyear.“The

vaccineswillbereadyontheshelf,”hesays,decliningtosay

whichvaccinehe’sreferringto.“We’llhaveallthe

needles,syringes,stoppers,andvials—allofthat

stuffwillbereadytoshipliterallythedaytheFDA

givesusa greenlight.”

IfEmergentisanythingtogoby,thattime-

linelooks likea stretch.Itsfirstdoses ofthe

AstraZenecavaccinewon’tbeavailableuntillateJanuary

attheearliest.Productionfinallystartedinmid-September,

butit willtake 90 daystoproducebulkdoses,whichwill

thenbeshippedtoa separatecompany,CatalentInc.,based

inSomerset,N.J.,forfillingintovials,a processthattakes

another 45 daysincludingquality-controlchecks.

Withsomanyvaccinesintherace,OWScanturntoothers

if thecandidatesmadeatEmergentdon’tcrossthefinish

line,butfewerapprovalswoulddiminishthechancesof

deliveringmillionsofdosesquickly.Theworldneedsmore

thanoneshottogetbacktonormal.“SuccessforOperation

WarpSpeedis notsixvaccinesallworking.It’senoughvac-

cinesinenoughquantitiesbyyearendtovaccinatethemost

vulnerableAmericans,”Mangosays.“Theoddsofsixoutof

sixhittinginthetimeframewewant,I mean,you’dsooner

getstruckbylightning.”

ThebiggestthreattoOWS’ssuccessmayendupbeingnot

thescience,notthelogisticalchallenges,butpeoplerefusing

totakeanapprovedvaccine.A PewResearchCenterstudyin

Septembershowedthatjust51%ofU.S.adultssaytheywould

definitelyorprobablytakeit—downfrom72%inMay.

“Ithinkthisis a resultmostlyofthepoliticizationofthis

processandthefactthatit’shappeningaroundanelection

yearandthekindofpoliticsthataregoingoninthecoun-

try,”Slaouisays.Hishopeis that60%to70%ofAmericans

willbeimmunized,atwhichpoint,thoughCovidwon’tdis-

appear,thepandemicwillsubside.“Thecirculationofthe

viruswillbehugelyimpaired,”hesays.“Infectionswillgo

down,susceptiblepeoplewillsurvive,andlifewillgobackto

normal.I lookforwardtothat.”<BW>�WithDavidKocieniewski

Novavax

$1.6b

SanofiwithGSK

$2b

Phase

①②

Phase

①②US

③UK

Emergent Manufacturing $628m

TexasA&MwithFujifilm Manufacturing $265m

Corning Vials $204m

Si02 Vials $143m

ApiJect Syringes $138m

GrandRiverAseptic Fill-finish $160m

Cytiva Manufacturing $31m

Non-Vaccine Investments

DATA: U.S. DEPARTMENT OF HEALTH AND HUMAN SERVICES

Bloomberg Businessweek November 2, 2020