Astrazeneca Stock – Safe, stable, sold at cost: AstraZeneca’s vaccine deserves celebration, not scorn | Business
AstraZeneca is one of the shining stars of the pandemic. Not only did it produce a vaccine where other big players failed, the UK-Swedish company has pledged to sell it at cost until it is able to declare the pandemic over.
Because the vials that contain Astra’s vaccine can be kept in a normal refrigerator, it has managed to keep the cost down to about $3 (£2.20) a shot, compared with the $35 charged by US firm Moderna for its vaccine outside the States.
The low cost is one major benefit, but it is matched by the ease of transporting the vaccine, which puts it at the top of the list for use in developing countries.
As a result, there is almost limitless demand for the vaccine from across the globe. Astra has been attempting to ramp up production rapidly, but has hit problems. This has had some politicians near to frothing at the mouth.
Last week we had the Belgian MEP Philippe Lamberts accusing the company of “arrogance” and “dishonesty”. Then came the French foreign minister – speaking on national radio, as EU officials often have over recent months – as though Astra and the UK government were one and the same thing.
Jean-Yves Le Drian warned that the EU was prepared to block Astra vials at the EU border in order to catch up with the UK’s impressive vaccination programme. While the UK has enough vaccine to complete the first stage of the vaccination process, Le Drian said it would struggle to obtain and administer the required second doses unless EU countries were given greater access Astra’s production.
This is not the first threat to the UK that treats Astra as if it were a state-owned enterprise; it is just the latest in a series that EU officials hope will force Boris Johnson to buckle this weekend and agree to share more of the output.
A bargain of some kind is likely after the best efforts of the two UK sites that manufacture Astra’s vaccine failed to live up to expectations. It has proved difficult to scale up the plants in Keele, Staffordshire, and Oxford and marry their work with a plant in Wrexham that completes part of the process. Without the scale needed on British soil, the company has to rely more than it would like on imports to meet its UK contractual arrangements.
But in truth, all the pharmaceutical businesses making vaccines have struggled to ramp up production. They all have to piece together the manufacture of arm-ready vials across several sites, sometimes in different countries.
Some UK ministers believe EU officials have been spurred on by domestic pharma companies, angered by Astra’s pledge to sell the vaccine at cost. There is also a suspicion of spite behind the concerns over the efficacy of Astra’s vaccine.
US officials have poured scorn on the company for revising down by three percentage points its overall effectiveness, from 79% to 76%, after taking a closer look at the results from 32,000 vaccinated people. The American authorities had raised concerns that the results reported from Astra’s US trial were outdated.
But if we rewind to last year, governments were cheering any sign of a vaccine that was more than 60% effective, and they were all prepared to roll out nationwide programmes with such a drug.
It is hard to comprehend the criticisms – other than as a way of venting pent-up corporate and nationalistic jealousy – when AstraZeneca reports that the study shows the drug remains 100% effective against severe Covid.
The prospect of eight more vaccines by the autumn should calm everyone’s nerves, but with infection rates soaring across Europe and vaccine shortages making the situation worse, it is clear that cooperation across the channel is the only way forward.
Drax biomass move will not get it out of woods with climate critics
The idea that felling trees and burning them could be good for the environment goes against all intuitive logic. But this is exactly the plan put forward by Drax Group, once one of the most polluting coal power generators in Europe, as its answer to tackling Britain’s carbon footprint.
The FTSE 250 energy company has been steadily converting its coal power plant in North Yorkshire to burn wood chips – known as biomass – instead of fossil fuels. Shipped from the southern states of the US, the pellets are subsidised through household energy bills to the tune of hundreds of millions of pounds every year.
This week, Drax shareholders will vote on whether to move ahead with the £470m acquisition of a Canadian biomass producer, a deal that would double its consumption of wood pellets.
It is a high-stakes bet on “carbon- neutral” biomass playing a major role in the UK’s journey to becoming a net-zero carbon economy. It will also put the company back on a collision course with environmental groups and sustainable investors.
For Drax critics the “carbon accounting” doesn’t stack up. They say the theory – that the carbon emissions absorbed by growing trees would effectively offset the carbon released when their waste wood is burned – is flawed because it ignores the time it takes for trees to reach full size and the speed at which power generators burn biomass.
Drax has countered with peer-reviewed evidence to the contrary. A war of conflicting scientific studies, volleys of open letters and flying counterclaims is brewing.
Shareholders should keep in mind that no matter how much ammunition the company throws, it will still be just where it was in its coal-burning heyday: at war with the environmental movement. This hill of pellets may not be worth dying on.
Sunak must lift secrecy over Covid lending
The chancellor will face some difficult issues next month when businesses begin paying back the loans that saved them from going bust over the past year.
Rishi Sunak will need to consider how aggressively to push organisations that are struggling to make repayments – not easy when UK businesses have borrowed more than £73bn through government-backed Covid-19 schemes. A conservative estimate by the Office for Budget Responsibility is that at least £28bn will be written off.
But before then, Sunak needs to reconsider the secrecy that surrounds the schemes. The government has promised to release the data, after notifying borrowers that their names will be made public. It is obliged to do so, as the loans were issued under EU state aid rules, which require disclosure of support worth more than €100,000.
Since February, those that have claimed furlough cash have seen their names on published lists. Likewise, the Bank of England, which administers the Covid corporate financing facility for larger firms, has released details of its loans since June last year.
Other lending – through the coronavirus business interruption loan scheme, the coronavirus large business interruption loan scheme and “bounce back” loans – has not yet been disclosed.
Labour has stressed how crucial this information is since the relationship between collapsed finance group Greensill and Liberty Steel came to light. Greensill is understood to have parcelled up several £50m government-backed loans for steel tycoon Sanjeev Gupta, owner of Liberty Steel, which employs more than 5,000 people. It is reasonable for them – and the nation – to ask how much their employer depends on government loans, and whether their jobs were saved by deals that manipulated the system.
Ministers must come clean soon or risk not just a breach of the EU state aid rules, but also to further investigations into Greensill.