From a windswept sea wall on England’s north Kent coast, Marie King points to miles of empty marshy farmland where there will soon be thousands of solar panels and one of the country’s largest battery installations.
A mile from the village of Graveney’s Norman church, hundreds of shipping containers full of battery cells will help deliver power to the UK grid. It will provide a service essential to managing the increasing use of wind and solar power, the supply of which fluctuates with the weather, and delivering on politicians’ promises of a greener future.
“It’s the scale of this project that worries me,” Ms King, a retiree who used to work in financial services in London, says. “We’re not against renewable energy — we just think it needs to be in the right place.”
Such battery plants are set to become a familiar sight across the UK and elsewhere. Renewables such as wind and solar are becoming cheaper than fossil fuels in most parts of the world, but they need storage to be a viable, stable source of energy. Last week, UK prime minister Boris Johnson vowed to install enough wind turbines to power every home by 2030, but that will require solutions to manage the intermittent supply of energy.
That is where batteries — devices which store electricity as chemical energy — fit in. Lithium-ion batteries, used in mobile phones and Tesla electric cars, are currently the dominant storage technology and are being installed from California to Australia, and most likely Kent, to help electricity grids manage surging supplies of renewable energy. Elon Musk, Tesla’s chief executive, has said he expects the company’s energy business — including the supply of solar and huge lithium-ion batteries for the grid — to be as big as its car business in the long term.
But along with lithium-ion batteries, cheaper, longer-duration storage technologies — most of which are not yet cost effective — will be required to fully replace fossil-fuelled power plants and allow for the 100 per cent use of renewable energy. At the moment, gas-fired power plants bridge the gap from renewables to provide stable supplies of energy for longer than current batteries can.
Part of the UK government’s green industrial revolution launched last week is a £1bn energy innovation fund to help commercialise new low-carbon technologies. These include a liquid air battery being built by Highview Power outside Manchester.
Without storage it will be harder for countries to significantly reduce their use of gas and coal-fired power plants and decrease the harmful effects of climate change, from rising sea levels to extreme weather conditions.
From battery technologies that use abundant raw materials to volcanic rocks, tanks full of liquid air, and systems that lower weights down abandoned mine shafts, companies are racing to develop the next breakthrough that will unlock large-scale renewable energy by mid-century. It’s a quest backed by several prominent business leaders, including Microsoft founder Bill Gates and SoftBank’s Masayoshi Son.
“If we want full decarbonisation then all these technologies will be required,” says Rory McCarthy, an analyst at the energy consultancy Wood Mackenzie. “But the scale of investment you need to make a dent on anything is billions of dollars.”
A supply chain ‘with zero inventory’
Every day electricity grids must constantly match supply with demand — a feat that becomes much harder when you strip out coal and gas-fired plants that provide a reliable, steady supply of energy. Donald Sadoway, a Canadian chemistry professor at the Massachusetts Institute of Technology, likens the grid to the “world’s largest supply chain, with zero inventory”.
In the first quarter, renewables provided a record 47 per cent of the UK’s electricity. Yet that success created a problem just weeks later when energy demand fell by as much as 20 per cent after the first national coronavirus lockdown in March. The National Grid’s job becomes more difficult when electricity generation from renewables reaches about 50 per cent of the total — it needs the help of big spinning turbines of fossil fuel plants to moderate volatility in the system.
With demand falling it meant the renewables share of the energy mix went above half and the engineers at the National Grid’s control centre were forced to perform a delicate balancing act, part of which involved increasing the use of storage — vindicating, say advocates, expansion of the technology.
It proved to be a test case for how the grid will look in the future, when there is a greater share of renewable energy, says Peter Kavanagh, chief executive of Harmony Energy, which provides power to the grid from six Tesla lithium-ion batteries in Poole on England’s south coast.
“Solar and wind are the cheapest form of generation in multiple countries, but you need that storage to make it work once you have got the renewable penetration to a certain size of your energy mix, like we saw during Covid,” he says. “Covid has . . . proven the business case [for battery storage] five years in advance.”
More than 97 per cent of the world’s energy storage is currently done by using electricity to pump water up to a high reservoir and then releasing it, which drives a turbine to create even more electricity, so-called “pumped hydro”. The reservoir of water acts as a way of storing energy. But these systems are challenged by geography and could be limited by increasing water scarcity in the future.
The advantage of lithium-ion batteries is that they can be placed anywhere and can provide power to the grid very quickly, as they do in electric cars. They can respond in milliseconds and generally provide up to four hours of storage, helping grids deal with sudden outages in electricity generation, but are less cost effective in the longer term. In the UK, the majority of large-scale lithium-ion batteries provide energy for 30-90 minutes.
And local residents such as Ms King worry about their safety, after a spate of battery fires over the past few years. There were 33 fires at installations in South Korea between 2017 and 2018 alone, and there have been more recent incidents in the UK and US.
A patchwork of technologies
Alternative technologies could enable safer storage of large amounts of energy for longer periods of time, which would allow even greater integration of wind and solar. But they need to be scaled up quickly in order to meet rising demand and become cost competitive.
In January, the California Energy Commission, the US state’s primary energy policy and planning agency, issued a call for long-duration energy storage — defined as providing energy for over 10 hours — enough to store a day’s worth of solar energy for overnight use.
One of the winners of the tender was Invinity Energy Systems, a company that uses large batteries based on vanadium, a raw material used by the steel industry to increase the metal’s strength. These so-called Redox flow batteries — first developed by Nasa in the 1970s — use large tanks of separately charged electrolytes to store energy, which makes it easier to expand capacity than conventional batteries.
Matt Harper, the company’s chief operating officer, says vanadium batteries can store eight to 10 hours of renewable energy during the day and deploy it during peak demand, or overnight, helping to put a floor under power prices. They are also “more likely to put out a fire than start one,” he says, because they use a water-based electrolyte. They also last longer than lithium-ion cells — and can go for 30 years.
In the centre of Dalian, north-east China, Rongke Power is building the world’s biggest vanadium battery. At 800 megawatt-hours, it would be more than three times the size of the world’s largest lithium-ion battery installation in California. It would help Liaoning province’s electricity grid better integrate wind power.
“We would not be allowed to install a large-scale lithium-ion battery in the city centre, [due to safety concerns],” says Li Bin, Rongke’s marketing director. “The safety issues in lithium-ion batteries have not been solved.”
Yet vanadium prices are highly volatile and surged to $127 per kilogramme in November 2018 before falling to $25 per kg today, which could have an impact on the cost of production.
MIT’s Prof Sadoway believes that technologies need to be based on more abundant metals than those used in lithium-ion and vanadium batteries such as aluminium, sulphur, calcium and antimony. In 2005 he helped develop a liquid metal battery that uses calcium and antimony and a molten salt electrolyte. The company that developed it, Ambri, was backed from the beginning by Mr Gates, who invested in it after watching Mr Sadoway’s chemistry lectures online.
Ambri’s battery aims to store energy for longer than six hours and Mr Sadoway believes that its cost can go below $150 a kilowatt-hour when it is deployed at scale, which would make it cheaper than current lithium-ion systems. “We want to undercut lithium-ion,” he says.
The company has yet to find a large commercial customer and Mr Sadoway warns over the long timeline for developing new battery chemistries: “This is tough tech, it’s heavy industry, it’s not like writing code,” he says. “This is really hard.”
‘Stone age’ thinking
Others looking for storage options are avoiding batteries altogether and trying natural and physical solutions similar to pumped hydro — which can store energy for up to 20 hours — but without the need for natural reservoirs.
Outside the German city of Hamburg, a large grey concrete windowless building has the words “Welcome to the new stone age” written on the front in purple letters. The plant is run by Siemens Gamesa, the world’s second-largest wind turbine manufacturer, and uses 1,000 tonnes of volcanic rock from Norway to store 130 MWh of energy in the form of heat, providing enough energy for about 3,000 German households, or roughly 750 electric cars.
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Electricity is used to first heat the volcanic rocks to at least 600C. The energy can be stored for up to a week, but the target is to dispatch power overnight. The system can be installed in coal-fired power plants that are closing and use their turbines, according to Hasan Oezdem, head of innovation projects at Siemens Gamesa.
“You can turn them into giant storage facilities,” he says. “The biggest utilities are looking desperately for a second life option as you can’t sell them — nobody is buying coal-fired power plants. We offer to keep it running with a green purpose.”
On the outskirts of Manchester, a similar project is taking shape at the site of a decommissioned power plant — using vessels of liquid air rather than volcanic rock. Highview Power broke ground on its 250 MWh plant at Trafford Energy Park in November after winning a £10m grant from the UK Department for Business, Energy and Industrial Strategy.
“Lithium-ion is great technology, but it’s too small for the challenges the grid is seeing,” Javier Cavada, the company’s chief executive, says. “The business model of long duration [storage] is to make sure all the wind and solar generation is utilised.”
Lithium-ion: in the driving seat
Despite their various advantages, these technologies will find it hard to beat the manufacturing scale of lithium-ion, which has been driven by the surge of investment in electric cars over the past decade. The price of lithium-ion batteries fell 87 per cent in real terms between 2010 and last year, to about $156/kWh, according to Bloomberg New Energy Finance.
That price is likely to fall further. Globally, battery installations for grid storage are set to rise to 741 gigawatt-hours by 2030, most of it lithium-ion, led by the US and China, according to Wood Mackenzie. One GWh is enough to power 1m homes for an hour.
In addition, hydrogen, which is produced through the electrolysis of water using electricity, could emerge as a competitive solution for storing energy for longer periods of time. Hydrogen can be stored in underground caverns or depleted oil and gasfields.
Hive Energy, which is planning the Cleve Hill solar and storage site near Graveney, is deciding which technology to use for its battery but is likely to opt for lithium-ion, the company’s managing director Hugh Brennan says.
“It’s like trying to not buy an iPhone,” he says. “It’s also more profitable to provide short-term energy storage to take advantage of differing power prices.” The company plans to install at least 200 MWh of batteries, he says.
In Graveney, however, placards stand outside the church and alongside the road with pictures of gas masks and the slogan “No solar power plant!” Ms King and other residents say they are not against the expansion of renewable energy, but they hope that another storage technology will be used for the site.
“For all the risk it’s not giving them a huge ability to store energy,” Ms King says. “If there was different technology that was safer, clearly we would welcome it.”
Additional reporting by Nathalie Thomas in Edinburgh
Beyond lithium-ion: energy storage technologies
Storage of renewable energy requires low-cost technologies that have long cycle lives — where they can be charged and discharged many times — are safe and can store enough energy cost effectively to match demand.
Vanadium redox-flow batteries use two tanks containing positive and negatively charged liquid vanadium electrolytes that are pumped past a membrane in a cell. The batteries have less degradation than lithium-ion and a longer cycle life.
Liquid air is cooled to minus 196C, after which it is stored in tanks. It is then heated, which drives a turbine to generate power. An alternative uses heated compressed air to store energy in purpose-built caverns.
Gravity storage involves lifting heavy blocks up and down abandoned mine shafts as a way to store and generate energy.
Thermal energy storage Matla, a company backed by Bill Gates’ Breakthrough Energy Ventures, stores energy as heat in the form of molten salts. The company says the technology can last longer than 20 years and is suitable for six-plus hours of storage.
Liquid metal batteries uses metals that naturally separate when heated to form a cathode and anode separated by a salt electrolyte. Once initially heated the battery maintains its high operating temperature by generating heat on discharge and charge.
Low-cost batteries using cheap raw materials such as iron, sulphur and zinc offer alternatives to lithium-ion battery technology. Zinc-based battery developer EOS, for instance, says its battery has capacity to discharge energy over three to 12 hours. Form Energy, a start-up backed by Bill Gates, says its battery can store energy cost effectively for up to 150 hours
Hydrogen using electricity to produce hydrogen is a way of storing energy, but there is a substantial loss of energy in the process, making it less efficient than batteries.
Investors look to Sunak for clarity on new UK infrastructure bank
Ever since chancellor Rishi Sunak announced the setting up of a UK government infrastructure bank last autumn, investors have wondered what its role will be. Next week, in the Budget, they will get the answer.
The Treasury has only said it will focus on supporting new technologies that are too risky for private finance and would contribute to meeting the government’s target of net zero carbon emissions by 2050. As examples, it gave carbon capture technology and the rollout of a nationwide network of electrical vehicle charging points.
The selection process has just begun for a part-time chair, working two to three days a week, and it is scheduled to open on an interim basis on April 1.
The bank’s creation has prompted a debate about how infrastructure should be funded in the UK, at a time when the government’s finances are stretched and customers are likely to resist tax or bill increases, the means by which many sectors — such as ports, airports, energy, telecoms, water, and electricity — are funded.
Many of these assets in England are owned by sovereign wealth, pension and private equity funds, and regulated by arm’s length bodies, under one of the most privatised infrastructure systems in the world.
Dieter Helm, a utilities specialist at Oxford university, said the bank was “a good idea but it needs scale — a balance sheet and capital funding from the state, in which case you’ve essentially created a new arm of the Treasury”.
“The question is whether this is going to be the primary vehicle through which the government implements infrastructure,” he said.
John Armitt, chair of the National Infrastructure Commission, a government advisory body, suggested it needed an initial £20bn over five years to make an impact and reach projects the market might be unwilling to support.
The institution, which Sunak has said will be based in the north of England as part of the government’s levelling up agenda, will partly replace the low-cost finance provided by the European Investment Bank, which is no longer available since Brexit. But it is unclear if it will be able to match the €118bn the EIB has lent to the UK since 1973.
Sunak has promised that the government, which spends much less than most European states on infrastructure, will spend £600bn over the next five years. But ministers hope that more than half their national infrastructure plan will be paid for by the private sector. However, private finance is generally more expensive than government borrowing and requires taxpayers to underwrite the construction and financial risks.
“The government wants the public to believe that the country can have this wall of private sector investment without higher bills and taxes now but investors will only come if the government will guarantee they will receive a return and it acts as a backstop,” Helm said.
The lockdowns have taken a heavy toll, for example forcing the renationalisation of rail services. At the same time the Eurostar train service, airports and airlines have called for taxpayer bailouts, while the government is also paying for some households’ broadband.
Although the prime minister has in the past year given the go-ahead to some rail and road schemes, including a tunnel under Stonehenge, other projects — including £1bn of rail improvements — have been axed.
Meanwhile, local authorities — which are responsible for urban roads and other key infrastructure — have been forced to shift their limited financial resources to care for the elderly and vulnerable during the pandemic and so want more central government help.
Despite this growing demand, some investors have questioned the need for the new bank, even though they are popular elsewhere — such as Canada, which established one in 2017.
“Given there is at least $200bn of international capital looking for projects in which they can invest, the government has to be careful it doesn’t just crowd out existing finance,” said Lawrence Slade, chief executive of the Global infrastructure Investor Association, which represents private sector investors.
He argued the new bank, which will take over the government’s guarantee scheme, should only take on projects that are “too risky” for institutional investors, pointing out that the Canada Infrastructure Bank was mandated to lose up to C$15bn (£8.45bn) over 10 years. “It’s not yet clear what question the new infrastructure bank is trying to answer,” he said.
Ted Frith, chief operating officer of GLIL Infrastructure, a £2.3bn fund backed by UK pension funds, said the EIB loaned money at competitive rates to projects that also borrowed from capital markets. “This is a global market and there are plenty of alternative sources of finance to replace the EIB,” he said. However, he added that the infrastructure bank could play a role in addressing the shortage of available projects.
While investors will put equity into existing or smaller infrastructure projects — such as an airport extension or a wind farm — they are wary of new projects, according to Richard Abadie, head of infrastructure at consultancy PwC, because the latter carry long term construction risks and do not provide an income stream for several years.
“The NIB can play a role de-risking projects but the main challenge is how we can afford and manage the cost of energy transition, not whether finance is available to bridge the cost,” he said.
H&M experiments as it refashions stores after the pandemic
The Hennes & Mauritz flagship store on Stockholm’s main square is trying to break the mould. A woman sewing a patch on to trousers, party dresses for hire, a beauty salon and a personal shopping service is not standard fare for most fast-fashion outlets.
But it could be a taste of things to come as H&M, the world’s second-largest clothes retailer, works out what to do with its vast network of 5,000 stores after a pandemic that has increasingly pushed shoppers online. The Swedish chain is not just looking at services such as renting and repairing clothes, but on whether its shops can play a role in the logistics of online selling.
For Helena Helmersson, appointed last year as the first H&M chief executive outside the company’s founding Persson family, it is all about boosting relationships and engagement with customers.
“The physical store network that we have is one of our strengths. It’s the different roles the stores can play, the different formats. What kind of experiences are there in a store? Could they be part of an online supply chain? There are so many things to explore . . . it’s almost thrilling,” she told the Financial Times.
Helmersson, 47, has had a tough first year as chief executive. At the height of the first wave of the Covid-19 pandemic, four-fifths of H&M’s physical stores were closed and a big push online was unable to offset the hit. Sales fell a fifth in H&M’s financial year until the end of November to SKr187bn ($22.6bn), while pre-tax profits plunged 88 per cent to SKr1.2bn, interrupting a nascent recovery after years of decline.
Sales plunged in March and April, before rebounding strongly in the summer, and then getting hit again around Christmas.
But as the pandemic has forced H&M into speedier decision-making and increased flexibility and with Helmersson forecasting a wave of pent-up demand when Covid-19 comes under control, the chief executive is emboldened to say: “Overall, we will come out of the pandemic stronger.”
Anne Critchlow, analyst at Société Générale, said that relatively small increases in sales at H&M could lead to bigger rises in profits. “Potential recovery is part of the attraction of H&M to investors at the moment: it’s very highly operationally geared. H&M should be the fastest to recover,” she added.
But she argued that Inditex, the Spanish owner of Zara that overtook H&M as the world’s biggest fashion retailer by sales a decade ago, was a “better quality company”, and that the Swedish group may be a “bit slower” at returning to its pre-pandemic profit levels as some customers steer clear of its stores.
H&M’s shares fell consistently from 2015 to 2018, before largely treading water since then, although they have climbed 50 per cent since their Covid-19 low in March last year.
Helmersson, a H&M lifer who joined the retailer in 1997 as an economist, said she started to see “light at the end of the tunnel” after a “very demanding” period. “I have super-high expectations on myself. Adding a crisis on top of that, it’s been a really tough year.”
Now, however, her focus is moving to a critical question for H&M: “Where do we need to move faster?”
Despite being in fast fashion, critics said H&M had become slow, outpaced by nimbler Inditex and online retailers such as Zalando and Asos. Inditex could get new clothes to Zara stores in weeks from nearby manufacturing sites in Europe while H&M, with more sourcing in Asia, took longer. Opening new stores gave the Swedish group an easy path to sales growth but did not help its profit margins, which have been declining consistently for the past decade.
Helmersson said H&M took “really, really fast decisions” at the start of the pandemic on how it bought garments, worked with its supply chain, and moved to selling more online. She pointed to how technology allowed designers, suppliers and the production office to work together at the same time to produce new clothes, rather than waiting for one to send a garment to another.
“It sounds really basic but if you do that in many processes you can be much faster. You also have data to give you more customer insight, which means you can act much quicker,” she said, adding that accessories can now go from conception to store in a few weeks, T-shirts in six weeks, and trousers in eight.
H&M is also trying to increase its speed on sustainability, bringing in a target of using 30 per cent recycled materials by 2025. Critchlow said that the group was leading the industry in its attempts to become circular, although many voice concerns over how much fast-fashion groups encourage excess consumption. Strong investor demand this month led to H&M reducing the interest rate for its maiden sustainability-linked bond, which was 7.6 times oversubscribed
Helmersson, a former head of sustainability at H&M, said that the hardest task for the retailer was decoupling its growth from its use of natural resources. She added that the trials in repairing and renting clothes as well as selling second-hand garments through the website Sellpy, in which H&M is the majority owner, were important but difficult to gauge how big they could become. “We have such a size that we can to some extent influence customer behaviour. But we will also see how willing they are,” she added.
Critchlow said H&M deserved “full credit” for the trials but that they were unlikely to lead to soaring profit margins. She added that the crucial questions were how fast H&M returned to pre-pandemic sales and profit levels and whether it could go further. “It requires H&M to manage the costs of the stores,” she said, adding that renegotiated leases during the pandemic had only helped a little.
There is also a debate about how much increasing online sales — expected to rise from 28 per cent of H&M’s total last year to about 43 per cent in 2025, according to Critchlow — help given that they come with additional costs such as delivery and returns as well as in logistics.
Helmersson is unbowed, arguing that H&M will offer multiple ways for customers to engage with the retailer through various store formats offering different services, online, and its own club. “The customer journey is constantly evolving,” she said. “We will follow, and influence. Before, it was about transactions, now it’s about relationships with customers.”
How vaccine laggard CureVac hopes to come out on top
Fifteen years ago, after an hour-long meeting in the basement of a Paris hotel, Bill Gates agreed to back a German entrepreneur who claimed a new class of drug would revolutionise the fight against infectious diseases.
When Covid-19 shook the world last year, CureVac — the company built by Ingmar Hoerr with the help of the Microsoft founder’s money — seemed perfectly positioned to make good on that investment and produce a “best-in-class” vaccine.
It could be ready “by the autumn”, predicted European Commission president Ursula von der Leyen.
But while local rival BioNTech and US competitor Moderna brought to market vaccines using similar messenger RNA technology in less than a year, CureVac’s product is lagging up to six months behind.
This is the story of how one of the most promising vaccine makers is trying to get back on track after development delays, the brain haemorrhage of its founder and a bizarre — possibly fictional — attempt by the White House to steal the company away from Germany.
‘America first’ again?
Following a meeting with pharma executives at the White House in early March, German media reported that the Trump administration had sought to lure the company, which also has a Boston base, to the US and secure its vaccine exclusively for Americans.
The news led to an uproar in Berlin, especially after billionaire Dietmar Hopp, CureVac’s lead investor, seemed to verify the reports in a magazine interview.
Days later, CureVac’s American chief executive Daniel Menichella abruptly left the company, even though the biotech denied an official approach by the US government had ever taken place. The Trump administration also rubbished the reports — in one of the few public rebuttals by the former president’s staff against a reported “America first” policy stance.
Amid the turmoil, Hoerr, the company’s founder who had just taken over from Menichella as chief executive, suffered a brain haemorrhage in a hotel room, and relinquished the role again.
Venture capitalist Friedrich von Bohlen und Halbach, who sits on CureVac’s board, told the Financial Times that the Trump tale was probably “made up” by people leaping to conclusions about the presence of a German company at a US government event.
But the reports were enough to spook European leaders. On March 16, von der Leyen spoke to CureVac’s management via video conference, and then publicly offered the 20-year-old company an €80m loan “to quickly scale up development and production of a vaccine”.
By mid-June the German government had chosen to invest €300m in CureVac, for a 23 per cent stake, ahead of its flotation on the Nasdaq in August. Economy minister Peter Altmaier left little doubt as to Berlin’s motives: “Germany is not for sale, we don’t sell our silverware,” he told reporters.
Suggestions that CureVac’s investors may have spread the Trump tale to engineer a response from Angela Merkel’s government were strongly denied by people close to the company.
“It was not the plan to get German public money,” said von Bohlen, who first invested in the nascent company in 2004, and whose holding company, Dievini Hopp, created with Hopp, still owns half of CureVac.
In any case, the company was unlikely to up sticks. When Hopp, a co-founder of tech group SAP, first agreed to invest roughly €2m in CureVac in 2005, he wanted to “make sure that we build infrastructure and new jobs here in Germany”, von Bohlen recalled.
Waiting for data
There was some rationale behind the German government’s investment, however. CureVac, which was developing a rabies vaccine when the Covid-19 crisis began, had more experience with infectious diseases than BioNTech.
Some scientists also believed that CureVac, which unlike its rival does not chemically modify its mRNA, could end up prompting a stronger immune response.
But an initial readout from phase 1 trials in November damped the high expectations. The data showed that the level of antibodies produced by the vaccine was higher than the average in the blood samples of recovered Covid-19 patients, but appeared to be lower than those produced by the BioNTech and Moderna’s candidates.
However, as each company’s results were measured using different assays and against a different group of convalescent patients, they were not directly comparable, according to Suzanne van Voorthuizen, an analyst at Kempen. “You are always comparing apples with oranges,” she said.
The inconclusive data did not deter the European Commission, which signed a contract to secure 405m doses soon thereafter. Manufacturing deals with Germany’s Wacker Chemie and Rentschler followed in the next few weeks, as well as with France’s Fareva.
CureVac also raised $517m via a share offering and its shares trade more than six times last August’s IPO price. Twice in the last few weeks the company’s market value has surpassed that of Deutsche Bank and now stands at about €16bn.
“In two years from now, nobody will care any more [about the delay],” said von Bohlen. “Capacity, quality and price — that is what everyone will care about,” he added, predicting that regular vaccinations would be required to protect against virus mutations and that CureVac’s mRNA technology would be ideally suited to that challenge.
An initial readout from large-scale phase 3 trials is expected in March, and although CureVac has given up on pursuing US authorisation, citing market saturation, approvals from the EU regulators will probably come halfway through 2021.
Being behind in the race to produce an mRNA Covid-19 vaccine could also end up being a blessing in disguise for CureVac, according to founder Hoerr, 52, who is recovering from his health crisis. He claims time spent perfecting the formulation of its candidate has given its product several competitive advantages.
Unlike vaccines by BioNTech and Pfizer, which currently have to be kept at an ultra-cold -70C while being shipped, and Moderna’s product, which must be kept at -20C, CureVac’s candidate is able to survive in standard fridge temperatures for at least three months, making it much easier to deliver to the developing world. “That’s not a miracle,” said Hoerr. “That is technology. You have to work on that.”
Additionally, at 12 micrograms per dose, it requires the smallest amount of active ingredient among the mRNA vaccines, enabling more efficient distribution.
CureVac, which claims to be able to produce 300m doses this year and a further 1bn in 2022, spent extra time scaling up its manufacturing network.
The positive assessment is shared by pharma giant GlaxoSmithKline, which bought a 9 per cent stake in CureVac in July and earlier this month pledged a total of €150m to develop so-called “next-generation” Covid-19 vaccines with the company to tackle new variants.
The UK government has also agreed to provide CureVac with access to its genomic sequencing expertise. In exchange, the UK will receive 50m doses of the biotech’s jab and permission to use contract manufacturers to produce it in Britain.
“The UK is one of the most advanced countries in understanding mutations and sequencing them,” said Wassili Papas, a portfolio manager at German institutional investor Union, which has a small stake in CureVac. “So for them to choose CureVac, there must be something to it.”
CureVac’s ambitions were given its biggest boost to date in early January, when German pharma group Bayer agreed to help with the production and approval of the Covid-19 candidate — the first foray into vaccine development in the company’s 158-year history.
Bayer told the FT that the agreement was a “one-off” and that the company “just wanted to help”, denying suggestions that Merkel’s administration had pushed for the partnership.
The German government told the FT that it “explicitly does not exert any influence on the operating business of the company via its shareholding”, while von Bohlen said Berlin was first informed by the companies of the agreement after the deal was closed.
Nonetheless, in a government press conference last month, Armin Laschet, the newly elected head of Merkel’s party and the premier of North Rhine-Westphalia, which is home to Bayer, was clear about the deal’s significance.
“We need to recognise how important it is at this moment not to be completely reliant on the global market,” he said, “but also to be able to independently produce in Germany.”
Two weeks ago, CureVac began submitting approval data to the European regulator, and with the first batch of doses secured by the EU, the vaccine could also offer the bloc a chance to repair some of the political damage caused by the much-criticised procurement of the BioNTech and Oxford/AstraZeneca jabs.
If successful, the company built by Hoerr, who has reportedly been nominated for a Nobel Prize, could even eclipse Bayer’s €64bn market value, said von Bohlen, and along with BioNTech, reshape the entire sector.
“MRNA has the potential to become, by orders of magnitude, the broadest therapeutic class in medicine,” he said. “It’s a bit of a revival of the German strength in the pharmaceutical industry.”
The bar chart in this article has been amended since original publication to correct a rounding error
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