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Analysis

AstraZeneca’s shot at redemption sows further confusion

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The latest blow to AstraZeneca’s tortured effort to bring a Covid-19 vaccine to the world arrived by way of a terse statement released on Tuesday at 22 minutes past midnight in Washington.

In an unprecedented late-night intervention, the National Institutes of Health warned that an independent board of experts overseeing a large US study of the vaccine had “expressed concern that AstraZeneca may have included outdated information” when it announced results from the trial in a press release on Monday.

The dispute between AstraZeneca and the independent scientists — who sit on the trial’s data and safety monitoring board, or DSMB — centres on whether the company was wrong to publish data collected before a February cut-off point instead of including more recent figures as well.

The data up to February 17 showed the vaccine was 79 per cent effective at stopping symptomatic Covid-19, according to the company’s press release on Monday morning.

But in a letter sent to AstraZeneca later on Monday, which was copied to the NIH and another US government agency funding the trial, the DSMB said it thought a broader analysis including up-to-date results would show a lower efficacy rate of between 69 per cent and 74 per cent, according to a person who has seen it.

Anthony Fauci, a senior official at the NIH, told the Financial Times the agency was “not accusing anybody of anything”, adding: “[We are] just saying very, very frankly and simply, that we urge the company to work with the DSMB to review the data, and to ensure that it’s the most accurate, up-to-date data that was made public.”

AstraZeneca responded to the NIH statement by promising to publish the final data set from the trial within 48 hours.

The vaccine is already approved for use in the EU, the UK and other countries, and the primary purpose of the trial in question is to also secure a greenlight from regulators in the US.

But the US trial has acquired a significance that goes far beyond paving the way for an authorisation from the Food and Drug Administration, an endorsement that Pascal Soriot, AstraZeneca’s chief executive, has long sought.

Instead, the study offered a shot at redemption for a company that had been accused of bungling previous trials, which left unanswered questions over whether the jab was as effective in older people.

It was also hoped that the US study would boost global confidence in the vaccine by alleviating concerns over whether it causes rare but potentially deadly blood clots, which prompted several European countries to suspend its rollout.

According to a person briefed on the matter, AstraZeneca was “under pressure” to release the findings on Monday to prove that the vaccine had strong efficacy in people aged 65 years and more. The drugmaker also worried that it might be “accused of sitting on the data and not being transparent”, they added.

However, far from quelling concerns over the AstraZeneca jab, the findings from US trial have caused even more confusion.

Art Caplan, a professor of medical ethics at New York University who has served on about 20 DSMBs, said the scientists’ decision to challenge AstraZeneca’s claims of efficacy was “very close to going nuclear”.

The DSMB members must have been “gravely concerned that the claims in the press release were not merited” by the data they had seen, added Caplan. “The next move by AstraZeneca is going to determine the fate of the vaccine. If they mess it up, the vaccine may be beyond redemption in some countries.”

This was not the first time that the DSMB had questioned how AstraZeneca handled its trial data, according to a person briefed on the relationship, who said the scientists had become “impatient” with the company. But now the simmering tensions have spilled into public view.

AstraZeneca, the UK-based pharmaceuticals group that has developed the vaccine invented at the University of Oxford, has huge ambitions for its rollout: it wants to produce more jabs that any other company and to sell them at a non-profit price.

But AstraZeneca has struggled in the spotlight compared with other vaccine makers, including a clutch of much smaller and younger companies such as Moderna, the US biotechnology group.

AstraZeneca’s efforts have been tarnished by difficulties understanding how it sliced and diced data from its first phase 3 trial in November, an episode that has echoes of the latest drama, replete with confusing press releases that frustrated scientists. The company has also been embroiled in a dispute over production shortages in the EU.

When AstraZeneca released its US trial results early in the European morning on Monday, it appeared as though the data would finally put to rest many of the lingering doubts over the vaccine.

A person briefed on the matter suggested that Pascal Soriot, AstraZeneca’s CEO, had taken a lead in resolving the dispute: ‘He would obviously rather this hadn’t happened but he is completely focused on sorting it out’ © Reuters

In addition to an overall efficacy rate of 79 per cent, the press release said the vaccine was 100 per cent effective at stopping severe disease and hospitalisation — an improvement on its earlier phase 3 trial. Nor was there any evidence of problematic blood clots.

Armed with the trial’s findings, executives took to US television studios to tout the benefits of the jab, with Ruud Dobber, AstraZeneca’s US president, telling the business news channel CNBC that the company was “thrilled”.

But behind the scenes, things were about to go wrong. Within hours of the press release, a frustrated DSMB contacted AstraZeneca, Fauci at the NIH and the US Biomedical Advanced Research and Development Agency, or Barda, which has provided funding for vaccine development, according to people familiar with the developments.

AstraZeneca scrambled to address the DSMB’s concerns, with a person briefed on the matter suggesting that Soriot had taken a lead in resolving the dispute. “He would obviously rather this hadn’t happened but he is completely focused on sorting it out,” the person said. 

A person briefed on the disagreement suggested that the DSMB had only seen “raw data”, where Covid-19 cases had not been confirmed by a positive test result. Once “adjudicated” it might be found that a positive case was in fact the flu, or someone simply losing their sense of smell, the person added.

Now AstraZeneca is speeding through the final analysis. “It is a painful way to spend 48 hours,” the person said.

Another person with knowledge of the situation said that, before Monday’s announcement of the interim data, AstraZeneca had already been in the process of assessing the newer data that arrived after the February 17 cut-off point. The company does not anticipate that the newer figures will result in a meaningful change to its conclusions on efficacy, they added.

The person pointed out that the company had always said that it would conduct a so-called interim analysis and had twice described the findings as “interim” in its press release. 

“This isn’t just something they have cooked up . . . It was very clear more data was coming,” they said. The efficacy figure announced on Monday was likely to be “pretty close to where it will end up in the final analysis”. they added. “If the numbers do move around they probably won’t move around massively.”

However, that does not explain how the company ended up angering the scientists on the DSMB. Dan Barouch, a professor at Harvard and a clinical trial investigator in the Johnson & Johnson vaccine trial, said it was unusual and “not optimal” that the board had not seen what was going to be released. 

“Typically, the DSMB does an analysis and provides that to the company and in this case the government . . . The statement that comes out is one that everybody agrees to in advance,” Barouch added.

One observer said the company may have been trying to “keep it simple” after the November debacle, when the company and Oxford reported three separate efficacy numbers.

In the US, the White House was concerned enough to ask for a briefing from the NIH. The impact will also be felt in Europe, where health officials were hoping for a readout with clean, easy-to-understand figures to help increase public trust in the vaccine. One global health official asked: “How does AstraZeneca manage to screw up every time?”

London-listed shares in AstraZeneca closed 1.76 per cent lower on Tuesday as investors, who do not stand to profit from the vaccine during the pandemic, fretted that the company’s broader reputation could be hurt by its handling of the situation. 

Dan Mahony, co-head of healthcare for Polar Capital and an AstraZeneca investor, said the company was developing the vaccine for the “right reasons”, but described the latest developments as “frustrating”.

He added: “It is becoming a bit of a PR headache and it seems to be sucking up a lot of management time . . . As an investor you think ‘was it really worth it’? You don’t want to be constantly fighting fires, particularly over something that isn’t making you much money.”

Additional reporting by Kiran Stacey in Washington



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Analysis

Iranian TV action thriller delivers warning to Zarif

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It is hardly surprising that Mohammad Javad Zarif, Iran’s foreign minister and nuclear negotiator, is not a fan of Gando, a popular television drama that depicts an incompetent minister who scuppers nuclear talks with world powers by hiring dual nationals who turn out to be spies for MI6.

The series — made by an institute believed to be affiliated to the elite and hardline Revolutionary Guards — “is a lie from the beginning to the end” that “damages foreign policy more than me” by fuelling public mistrust, Zarif said.

By focusing on the nuclear talks, the Guards’ motive goes beyond creating compelling drama, reformist analysts say. Iran is in discussion with western powers about reviving the nuclear deal, a key reformist achievement, and hardliners want to deter the popular foreign minister from declaring his interest in the presidency in what is a crucial election year.

“I’ll be grateful to Gando-makers to let us continue our current job,” Zarif said this month, and commented that he would not run for the presidency.

The possibility of nuclear talks with the US and other powers has complicated an already fraught Iranian political scene ahead of the June election. Many reformists are pinning their hopes on Iran’s top diplomat to reinvigorate the nuclear deal and boost support at the ballot box. Hardliners might prefer to negotiate the deal themselves after the election. The polls are also seen as particularly crucial in case supreme leader Ayatollah Ali Khamenei, 81, dies during the next president’s term.

Pendar Akbari, left, and Ashkan Delavari, right, in a scene from ‘Gando’
Pendar Akbari, left, and Ashkan Delavari, right, in a scene from an episode of ‘Gando’. The series title refers to an Iranian crocodile able to distinguish its friends from its enemies © Bahar Asgari/Shahid Avini Cultural and Artistic Institute via AP

The purpose of Gando, which refers to an Iranian crocodile able to distinguish its friends from its enemies, “is to tell Zarif that should he dare to announce his candidacy, he will be destroyed immediately,” said one reformist analyst. “When the intelligence service of the Guards truly believes in the Gando plot lines, it means even if Zarif decides to defy such warnings, he will not be allowed to run.”

Centrist president Hassan Rouhani is due to step down this year after two terms and it is not yet clear who the presidential candidates will be. Politicians register as late as May and then have to be vetted by the Guardian Council, the hardline constitutional watchdog, which can disqualify nominees. Potential hardline candidates include Mohammad Bagher Ghalibaf, the parliament speaker and a former guards commander; Ebrahim Raisi, the judiciary chief; and Ali Larijani, a former speaker of parliament. On the reformist side, speculation has centred on Es’haq Jahangiri, first vice-president, Hassan Khomeini, a grandson of the founder of the Islamic republic, and Zarif.

A US-educated career diplomat widely respected in the west for his pragmatism, Zarif was instrumental in the historic deal in 2015, under which Iran curbed its nuclear activity in exchange for the lifting of sanctions. But Donald Trump abandoned the accord in 2018, imposed sanctions, including on Zarif, and said he would pursue a new accord to contain Iran’s regional and military policies. The US move emboldened hardliners, confirming to them the untrustworthiness of the US.

Zarif’s background in the US both as a university student and as Iran’s head of mission at the UN — during which he met US politicians including then senator Joe Biden — has long made him a source of suspicion for hardliners.

This wariness of both Zarif and the west is evident to viewers of Gando, as is the heroism of the Revolutionary Guards. Mohammad, the action hero protagonist, warns that western negotiators may sabotage refineries as part of nuclear talks. Mohammad works out of elaborate facilities akin to those in a James Bond film. The fictional foreign minister is advised by a media adviser, the main culprit, “to enter into direct talks with the US and accept the conditions of the leader of the global village”.

Vahid Rahbani in a scene from an episode of ‘Gando’
Vahid Rahbani in a scene from an episode of ‘Gando’. State TV abruptly stopped broadcasting the series that was less than halfway through its 30-episode run © Hassan Hendi/Shahid Avini Cultural and Artistic Institute via AP

The dramatic scenes reflect, in part, the worldview of some of Zarif’s critics. “Reformists, Mr Zarif and his lobby group in Washington [Iranian dual nationals] should be wiped out from Iran’s politics,” said an aide to a senior hardline politician who is a potential presidential candidate. “We have to get rid of this cancerous tumour once for good.”

Gholamali Jafarzadeh, a former conservative member of parliament, said Zarif “is not a good statesman and should not run for president” while “reformists should know that their choices have no chance to be allowed to run”. 

This month, state TV abruptly stopped broadcasting the series that was less than halfway through its 30-episode run. Local media said broadcasts would resume when the presidential race was over. Iran’s centrist president Hassan Rouhani, whose signature achievement is the nuclear deal — alluded to the show on Wednesday and said “people’s money” should not be spent on “fabrication of the truth” and “distortion of facts”.

After three years of sanctions, many voters are disillusioned by the infighting and the prospect of real change, whatever the outcome of the election. “Whether Zarif or a figure more senior than him runs or not, I’m not going to vote,” said Hamid, a 40-year-old engineer. “Let the Guards win the election as they are the ones who are running the country anyway. Why shall I make a fool of myself?” 



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Analysis

Rising inflation complicates Brazil’s Covid-19 crisis

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After seven months in lockdown, Michele Marques received some unwelcome news when she returned to work: while she was away the prices of almost all the products she uses as a hairdresser had soared.

“A box of gloves rose 200 per cent. Colouring products increased at least 100 per cent,” said the 37-year-old from São Paulo, underlining how costs were rising while her revenue had collapsed. “I had to raise the price of my services, too.”

It is a dynamic that is playing out across Brazil, adding an extra layer of complexity to the country’s coronavirus crisis, which has already claimed the lives of almost 350,000 individuals and pushed hospital services to the brink.

With much of Latin America’s largest economy being shuttered, inflation is surging to its highest level in years, fuelling a silent scourge of hunger among poorer citizens that has run in parallel to the Covid-19 pandemic.

“The high price of staple foods — rice and beans, for example — has led to the disappearance of these items from the table of millions of Brazilians,” said Ana Maria Segall, a researcher at the Brazilian Research Network on Food and Nutritional Sovereignty and Security. In the 12 months to the end of March, the price of rice increased 64 per cent and black beans 51 per cent.

“In Brazil currently food inflation has penalised the very poorest, preventing them from having adequate access to food and in many situations leading to hunger,” she said, adding that rising unemployment and the curtailment of social programmes were also contributing factors.

Volunteers hand out food in São Paulo © Alexandre Schneider/Getty Images

Less than half of Brazil’s population of 212m now has access to adequate food all the time, with 19m people, or 9 per cent of its inhabitants, facing hunger, according to a recent report by Segall’s group.

“I’m doing some odd jobs, but it’s not enough to keep us going,” said Jonathan, a 28-year-old who lost his job in the kitchen of a Chinese restaurant in São Paulo when the pandemic began. He said he now struggles to provide enough food for his three young children and pregnant wife.

On a 12-month basis, inflation in June is expected to surpass 8 per cent, far above earlier estimates. In the 12 months to March, food prices jumped 18.5 per cent, while the price of agricultural commodities in local currency surged 55 per cent and the cost of fuel increased almost 92 per cent.

Line chart of Percentage increase over past 12 months showing The price of rice in Brazil is soaring

The developments pose a fresh challenge to President Jair Bolsonaro, who is already under fire for his handling of the Covid-19 pandemic. Across Brazil’s biggest cities, graffiti has sprung up labelling the populist leader “Bolsocaro” — a portmanteau of his name and the Portuguese word for expensive.

The rising prices are also likely to provide useful ammunition to leftist former president Luiz Inácio Lula da Silva, who returned to the political fray last month and may challenge Bolsonaro in elections next year.

“Bolsonaro is to blame for the increase in food prices, he is to blame for everything. They have to remove this guy,” said Maria Izabel de Jesus, a retiree from São Paulo.

Armando Castelar, a researcher at the Brazilian Institute of Economics, said the government had underestimated inflation both in terms of the numbers and also “how much a concern it should be”.

He attributed the rising prices to the devaluation of the Brazilian currency, triggered in part by the stimulus packages passed by the US government — which helped to bolster the dollar and led to higher Treasury yields — and the brighter economic outlook outside Latin America.

“You have a situation where commodity prices are going up because the global economy is going to grow a lot this year. With the growth in the US, interest rates are going up and the dollar is strengthening. This puts a lot of pressure on the exchange rate in Brazil and emerging markets in general,” he said.

As the spectre of inflation loomed last month, the Brazilian central bank raised its key interest rate by 75 basis points, higher than the half-percentage point many economists had expected. A further rate rise is expected next month.

“The central bank acted correctly, but it cannot stop there. It is important not to be too lenient in dealing with this,” said Castelar.

Silvia Matos, a co-ordinator at the Brazilian Economy Institute, also pointed to Brazil’s weakening currency as a contributing factor to inflation. But she said the slide in the real was triggered by investor concerns over Brazil’s deteriorating public finances.

Following the creation of two separate stimulus packages to mitigate the impact of Covid-19, government debt has risen to about 90 per cent of gross domestic product, a high level for an emerging market economy.

The rollout of the second of these packages began this month, with 45m Brazilians set to receive $50 a month for four months.

Critics said, however, these stipends were not nearly enough to keep people both fed and at home in lockdown.

“It is essential that the emergency aid is of a greater value, so that people do not leave the house but no one also stays at home starving,” said Marcelo Freixo, a federal lawmaker with the leftwing PSOL party.

“We need to reduce the circulation of the disease. Brazil is already experiencing 4,000 deaths per day. We will reach 500,000 total deaths by the middle of the year.”

Matos says that inflation had hit poorer citizens much harder than middle-class and rich Brazilians because a larger portion of their income was dedicated to food, the price of which has increased substantially.

“The only thing that could help right now is to get out of this pandemic,” she said.

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Analysis

Can CVC pull off a $20bn ‘deal of the century’ at Toshiba?

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Proposed management buyout looks like an improbable win for the Japanese conglomerate’s embattled CEO



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