AstraZeneca Blooper

Efficacy is 69-75%, not 79%. But that's not the point.

As per the WashPost, AZ over-stated its vaccine efficacy by a few percent in their Monday press release. It seems AZ reported a 79% efficacy number from a February interim analysis while the full analysis including March may lead to something more in the range of 69-75%.

The National Institute of Health (NIH) was not amused:

Federal officials were taken aback by the board’s allegations. One said the way that AstraZeneca handled the results was the equivalent of “telling your mother you got an A in a course, when you got an A in the first quiz but a C in the overall course.” Another said the disclosure by the board would inevitably hurt the company’s credibility with U.S. regulators.

There’s no significant issue with the vaccine, except among the nitpickers, the EU being among them. But a lot appears off with AstraZeneca’s messaging. Here’s Fauci holding his head in his hands:

“The irony of this is that it’s very likely a very good vaccine, and this sort of thing does nothing but cloud the picture. I don’t think it reflects on the vaccine,” Fauci said. “I think it reflects on how the data has rolled out.”

The problem appears to be that when the interim analysis was done in Feb, there were a number of cases that were suspected to be covid-19 but had not yet been adjudicated. So the trial’s monitoring board recommended that AstraZeneca hold its horses until the final numbers are in.

But horses were not held.

Looking beyond the drama, AZ will eventually be approved by the US because the vaccine is fine. Also, an FDA rejection could create loss of confidence globally in this vaccine. Since this is expected to be the workhorse to get much of the world vaccinated, failure is not an option: three billion doses are to be delivered by end of this year.

The vaccine has some significance for AstraZeneca’s stock, but perhaps more so for Emergent Biosolutions (EBS). They are one of Astra’s manufacturing partners, along with Serum Institute of India. Their facility in Maryland is currently sitting on a stockpile of millions of doses, awaiting approval. Given its capability to produce billions more, EBS may well turn out to be one of the main factories supplying the world.

Wild ride for Emergent Biosolutions stock (Source: Bloomberg)

EBS jumped 6% on Astra’s first release and then subsided after the scolding from NIH. The stock has been oscillating wildly between $80-130 in the last nine months as this vaccine saga has unfolded. Right now it is at 90-ish.

I can’t say I don’t like it at this price.

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