Published: February 5th, 2021
Two new COVID-19 vaccines generating positive results in clinical trials are giving Sterling a shot in the arm this week, as markets and analysts react positively to the news.
The likelihood of two new vaccines from Janssen (a division of Johnson & Johnson) and Novavax promises to bolster the UK's supply of inoculations, leading to faster vaccination rollout, the end of lockdowns, and improved economic prospects for recovery.
Forex analysts say the UK’s relatively rapid vaccine programme is already helping BGP compete against other majors like EUR and USD. The two new vaccines are designed to combat the new, more virulent strans of COVID form the UK and South Africa.
London has an order in for 30 million doses of the Janssen jab, which is being made available at cost by the pharma giant. A statement from the British Vaccine Taskforce said it might be ready before month-end.
The vaccine from Novavax has shown to have 89.2 per cent efficacy in trials against the new coronavirus strains. Efficacy against the original covid-19 form is as high as 95.5 per cent, putting it neck-to-neck with vaccines from Pfizer and Moderna. The Novavax candidate is a two-dose shot that works by mimicking a protein called spike.
Janssen’s new vaccine candidate is a single-shot inoculation, which would speed-up rollout versus the two-shot vaccines currently available.
On the positive vaccine news this week Sterling reached mid-week highs making it the best-performing major, with forex strategists pointing to Britain’s fast-paced covid-19 vaccine programme as a likely pillar of support.
Strategists at ING said they expect the UK’s ‘vaccination advantage’ to keep pushing EUR/GBP downward for the rest of this year.
One major caveat to the upbeat market mood has been the potential for vaccine supply slowdowns. The new, more infectious South African and UK virus variants that emerged this year also threaten to derail the nascent vaccination programmes already underway. With two more successful vaccine candidates in the offing, investors and traders will have more confidence that Westminster’s vaccination timeline is achievable.
Analysis of trial data for the UK strain showed it was detected in more than half the cases where the placebo group caught the virus. Data from the Novavax trial for the South African strain showed a 60 per cent efficacy rate in stopping mild, medium, and intense cases of COVID-19.
Researchers at the Vaccines and Infectious Diseases Analytics Research Unit (VIDA) at Wits University in Cape Town said Novavax’s trial provided the first real evidence that it protects against the COVID strain currently raging across in South Africa.
The Janssen / Johnson & Johnson vaccine’s efficacy rate was lower against cases of moderate to severe COVID-19 infection, 57 per cent after 28 days, post-vaccination.
London has approved a deal for 30 million doses of the Janssen vaccine, with an option to take another 22 million.
Sir John Bell, an adviser to the UK's Vaccine Taskforce and Oxford professor, told the press this week that the prospects for success with the Jansen vaccine were good, and could have ‘a material impact’ on what the UK can do to speed up the pace of vaccinations. Supplies should be available in the UK in time to reach the government’s mid-February target.
While Janssen may seem to be in pole position, Novavax has made a submission for clinical approval to the MHRA, the UK's vaccine regulatory agency. Based on a rolling flow of information and trial results designed to accelerate regulatory approvals during a pandemic emergency. The process should allow the drug agency to reach a conclusion about granting an ‘emergency use’ license for the vaccine, leapfrogging the typical timelines for assessment and approval of new medical treatments.
Novavax’s vaccine comes in a ready-to-use liquid formulation that allows it to be distributed using existing vaccine supply chain channels. It’s stable in refrigeration at between two and eight degrees Celsius. If approved in that format, it will make a rapid rollout easier to achieve.
Novavax plans to manufacture the vaccine at a UK-based facility in return for grants and investments made by the UK government. That arrangement should help the company avoid any disagreements that might emanate from Brussels or other European capitals as a result of the continent's much slower vaccination rollout. Last week the EU took the pre-emptive step of restricting European vaccine exports to the UK, so as to avoid shortages in mainland Europe.
There are concerns however that Novavax is a small player in the pharma space and may not have the manufacturing capacity to produce enough vaccine doses on its own. At the moment there are plans to refit a disused Fujifilm plant in Newcastle to accommodate the UK government’s 60 million dose objective.
Novavax’s impressive COVID trial results may well have saved a company on the ropes. In 2019 its tanking stock price meant a delisting by NASDAQ was in the offing. The price plunge came after the failure of two consecutive vaccine trial failures in two years.
To protect its cash reserves, the company sold off two American factories, and cut headcount by more than 100 employees. In January of last year, it employed only 165 staff.
If approved, the Novavax vaccine will mark the first time a protein-based vaccine has been used successfully to fight the coronavirus pandemic.
Protein-based vaccines can be more complicated than others. The Novavax will have to create and sustain a ‘spike’ protein that is stable enough to hold on to its immunological properties throughout the production, packaging, storage, and distribution process
At press time the Bank of England announced it would not take interest rates into negative territory, a unanimous decision of the BoE's Monetary Policy Committee (MPC). The news prompted a rally in sterling against the dollar, euro, and other majors.