Coronavirus: The Race for a Vaccine

March 19, 2020

By John Pennett

Health care companies all around the world are racing to create a vaccine for COVID-19. And there is unprecedented cooperation among pharmaceutical companies, academia, data-oriented HealthTech start-ups, and government labs to share data. Health care giant Kaiser Permanente is working on a vaccine and has begun clinical testing, but they’re not alone. Johnson & Johnson, Regeneron, Pfizer and others are working on a vaccine or other treatment. Some may benefit from the FDA’s Fast Track process. Fast Track accelerates the development and review of treatment options. The FDA is also allowing testing kits to be sent out without some of the FDA review processes - providing a chance for health care companies to prove they can be trusted with accurate and precise manufacturing and QA on their own.

The clinical trials typically involve three phases. Phase 1 will likely include a small number of healthy participants who will each get varying doses of the vaccine while researchers search for any possible side effects. Phase 2 will contain a larger number of participants, possibly several hundred, to determine the effectiveness of the vaccine. In phase 3, the amount of participants and the duration of the study period will be increased. Only once the vaccine passes all tests will the FDA approve its use.

With coronavirus cases steadily on the rise, now is an especially important time for companies to consider the “greater good” rather than focusing solely on making profit. This is an excellent opportunity for health care companies to change the battered perception of the industry as a whole. While not always perceived as such, many life science companies are looking to make sure this vaccine is readily available and at a reasonable price. Roche Diagnostics has taken an early lead with providing access to their testing kits, as they were the first commercially developed COVID-19 test to receive FDA approval.

As other companies follow with potential coronavirus solutions, they may qualify for R&D tax credits. The development of vaccines requires great risks, as the necessary research can be costly and time consuming. State and federal R&D tax credits provide support for companies due to the unpredictable profitability that comes along with developing these treatments. Companies who are breaking new ground in medical research should capitalize on R&D tax credits, some of which could result in a short term positive cash flow impact.

The coronavirus has already disrupted supply chains for nearly 75% of U.S. companies. With production and shipping slowing globally and a significant portion of API (Active Pharmaceutical Ingredients) coming from abroad, it poses another challenge for those who are working on a vaccine or other treatment. The companies who create a successful vaccine more than likely will not be the ones that are able to scale up. Finding a manufacturer that has the necessary equipment and resources to manufacture enormous quantities will not be an easy task.

But right now, the eyes of the world are on the life science industry and they have a great opportunity to literally save the day.  Let’s all hope they do.

About John Pennett

John Pennett has public accounting experience with a strong emphasis on life sciences companies. Member New Jersey Society of Certified Public Accountants and New Jersey Technology Council and advisory board of eLabs.