Growing stock of unused COVID vaccines a financial risk for vaccine manufacturers | Mint
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Business News/ News / World/  Growing stock of unused COVID vaccines a financial risk for vaccine manufacturers
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Growing stock of unused COVID vaccines a financial risk for vaccine manufacturers

Slump in Covid cases across the world has resulted in a drop in demand for COVID jabs. The situation has made it difficult for vaccine makers to make up their losses. Recently Novavax urged the US govt to come up with a purchase commitments for their COVID-19 vaccine to help the firm stay afloat

Covid vaccine manufacturers across the world are facing slump in demand which resulted in rising stock of unused vaccines.Premium
Covid vaccine manufacturers across the world are facing slump in demand which resulted in rising stock of unused vaccines.

Driven by plummeting numbers of COVID cases across the world post-pandemic, several vaccine manufacturers are dealing with a slump in vaccine demand. The low level of COVID cases is also encouraging the government to pause coming up with another booster dose. The falling demand for vaccines across western nations like the US, UK, etc, is a major concern for vaccine makers who are sitting over a large inventory of unused COVID vaccines.

Recently, a slump in vaccine demand forced Novavax to request the governments to come up with purchase commitments for their COVID-19 vaccine to help the biotech firm stay afloat amid collapsing demand for jabs, reported Financial Times in its report.

In India, Serum Institute of India announced to restart the manufacturing of Covishield in response to the rising COVID cases. Till then, the company had six million of doses the Covovax vaccine available at private hospitals in May.

Earlier, Bharat Biotec, the Indian biotech firm making Covaxin, reported destroying nearly 50 million vaccine doses that expired earlier in 2023, reported ET. Government officials also stopped the procurement of new lots of COVID vaccines due to the slump in demand and the large lot of unused vaccines, that are near to their expiry date.

John Jacobs, CEO of Novavax, told the international daily that the government had earlier made commitments like a pact of $2.1 billion in advanced purchase agreements. The agreement was made between the US government and the biotech firm and stretched into 2025.

“We had to invest billions . . . to deliver a vaccine that helped to stem the tide of a global pandemic that was killing millions of people," Jacobs told Financial Times.

All of a sudden situation has come to a point where all of a sudden government is saying, "Now we don’t think we need it as much. Sorry, you’re out of luck,’ reported FT quoting John Jacobs.

Other vaccine makers are also suffering to survive in the COVID vaccine market as BioNTech/Pfizer plans to supply as many as 70 million doses a year until 2026, leaving lesser opportunities for Novavax, Moderna, and Sanofi.

Novavax, like its counterparts, BioNTech/Pfizer and Moderna, has the license to supply Covid jabs in the US EU, and other western countries. The slump in demand has posed a major challenge for all the COVID vaccine makers as they are facing steep falls in sales.

Especially for Novavax, the situation is more grim because of its financial situation. The company has to repay the UK government $112.5 million after it decided to not buy additional vaccine doses. Novavax is also facing a $700 million arbitration process associated with the cancellation of vaccine contracts with Gavi, an international body providing vaccines to poor countries. Moreover, its cash reserves fell to $637 million on March 31, which was reduced from $1.3 billion at the end of December. Its current liabilities stood at $2 billion.

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Published: 16 May 2023, 12:50 PM IST
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