Govt fast-tracks $2.9m for NZ biotech firm to build vaccine lab
Bevan Hurley reports from inside the race to prepare for New Zealand’s Covid vaccine rollout.
On June 8, Jacinda Ardern and Ashley Bloomfield took to the Beehive theatrette to announce the last active case of Covid- 19 from New Zealand’s national lockdown had recovered, and New Zealand would move to alert level 1 from midnight.
‘‘I did a little dance,’’ Ardern said when asked what was her immediate reaction to hearing the news.
‘‘ I showed Neve, she was caught a little by surprise having no idea why I was dancing around the lounge but enjoying it nonetheless.’’
The same day, the Ministry of Business, Innovation and Employment’s principal policy adviser of innovation policy, Michael Contaldo, emailed
Nidish Nair, the CEO of biotech firm BioCell.
‘‘Great to make a connection with you,’’ wrote Contaldo.
It was the beginning of a whirlwind few weeks, details of which are revealed in emails released under the Official Information Act, which saw MBIE approve a $2.9 million payment for Biocell to upgrade its research facility in Papatoetoe, Auckland, to manufacture a potential vaccine for Covid-19.
The speed with which the $2.9m deal was confirmed was largely due to Biocell weighing up a counter-offer to produce a nonCovid-19 vaccine.
An email exchange between MBIE and BioCell over the following few days ironed out a few basic details.
Nair told Contaldo that BioCell had more than 30 years’ experience in producing viral and bacterial vaccines, and was ‘‘GMP-approved’’, referring to New Zealand’s Code of Good Manufacturing Practice.
The email conversation was broadened to include Simon Rae, MBIE’s manager of international science partnerships, as well as BioCell director Max Shepherd, a scientist with a decades-long history of running biotech firms, and Deb Shepherd, his daughter and fellow BioCell director. Max Shepherd’s other daughter, Rebecca Shepherd, is also listed as a director.
On June 11, Rae drilled down into project costs, scientific staff expertise within BioCell, its business history, alignment with New Zealand’s vaccine strategy and sought evidence that it was reputable and competent.
‘‘It’s possible we might come back with some further questions, but I’d like to avoid having to do that,’’ Rae wrote.
‘‘ If there are things that you can only provide us under NDA [non-disclosure agreement] that you think would be important, we can accommodate that (although it makes decision-making a bit clunkier).’’
The following day, on June 12, four days after discussions between MBIE and BioCell began, UK biotechnology company Stabilitech announced a partnership with BioCell to manufacture its oral coronavirus vaccine, OraPro-COVID-19.
Nair told the Sunday Star
Times the deal had been signed in May.
A more detailed application was submitted a few days later, on June 16.
BioCell said it had already invested $900,000 to get its facility ready to produce vaccine material, and said it would cover its own staff costs. It gave assurances it would provide a
facility ‘‘entirely dedicated to the development and manufacturing of Covid-19 vaccines to meet the needs of the NZ population’’.
The grant would future-proof New Zealand’s capacity and contribute to its preparedness to deal with future pandemics, BioCell said.
It would be spent on a centrifuge, sterilisers, cell reactors, and allow BioCell to produce up to 24,000 vaccine doses per hour.
Rae responded the same day, wanting to know greater detail about the volumes of vaccine BioCell would be able to produce, the capacity of its bioreactors, whether they had been used to grow organisms such as bacteria or animal cells under controlled conditions, and other technical details.
Nair explained that BioCell would be able to manufacture five vaccine types of vaccine ( viral vector, protein subunit, attenuated virus, DNA and mRNA-based vaccines), should approval for the cost of upgrading their Auckland plant be forthcoming.
‘‘This is only possible as we already have most of the associated technologies, equipment, utilities, and the scientific and technical skillset at our facility,’’ Nair wrote.
A memo dated June 23 to Paul Stocks, an MBIE deputy chief executive, begins with the subject line: ‘‘Approval to purchase an option to contract BioCell to produce Covid-19 vaccines’’.
The email goes on to state: ‘‘We note that this purchase is atypical to the investments that SSIF ( Strategic Science Investment Fund) usually funds. However, while this purchase is primarily about building immediate capacity to manufacture a Covid19 vaccine, it is also a longer term, co-funded, investment in New Zealand’s general human vaccine manufacturing capability.’’
The memo cites the need, as part of the New Zealand Covid-19 Vaccine Strategy, to develop domestic manufacturing options.
While the most likely route to a safe and effective vaccine was to purchase one from an overseas supplier, it warned of the potential for manufacturing capacity to be ‘‘locked up by nationalistic policies that will constrain supply for developing countries in particular’’.
BioCell and South Pacific Sera had been identified as two candidates for short-term investment by MBIE after engaging with the biotech sector, the memo states.
‘‘While we will not have time to complete an exhaustive analysis of the sector before BioCell’s deadline, other credible manufacturers that we are aware of are largely involved in manufacturing animal vaccines, and it will take significant time and investment to transition this capability to manufacture human vaccines.’’
MBIE prioritised the BioCell investment because they said it would have cost significantly more to upgrade South Pacific Sera, a Timaru-based animal cell culture business which, unlike BioCell, is Medsafe-approved to make animal vaccines.
South Pacific Sera director William Rolleston this week said he had not been invited to make a funding application.
‘‘We did hear that BioCell had got $3m and it was all news to us. I think everyone was quite surprised to be honest. The only thing I know about BioCell is what they have on their website.’’
Rolleston wrote to the prime minister in March at the beginning of the coronavirus lockdown to offer to help should the Government need vaccine capability.
Months later a ministerial delegation including Ardern and Research, Science and Innovation Minister Megan Woods visited
their facility near Timaru.
‘‘That was very useful and we’re open to further discussion,’’ said Rolleston.
On June 29, just 21 days after contact was initiated, Rae, MBIE’s manager of international science partnerships, wrote to BioCell’s CEO Nair to confirm MBIE would support the proposal in principle for a five-year option to purchase Covid-19 vaccines.
‘‘Funds would be provided in a single, up-front purchase to allow BioCell to make the necessary capital investments, but would include provisions for repayment of funds if BioCell is unable to fulfil its obligations to provide the manufacturing capability described.’’
This was to come from the Government’s $37m Covid-19 vaccine strategy fund, and allow BioCell to invest in specialist equipment in order to produce up to 24,000 doses of vaccine an hour.
MBIE did cite some risks with the deal. ‘‘We do not have the ability to assess the technical feasibility of the proposal at this time, and cannot do so in the timeframes available to meet BioCell’s commercial imperatives.’’
The contract includes a clawback provision so that the investment could be recovered in the event BioCell could not meet the specifications it claimed.
MBIE officials visited the BioCell facilities on July 28 as part of its assessment. Formal approval was granted on August 14.
More than 100 coronavirus vaccines are in development around the world, and the global race to be first with a treatment that might allow life to return to normal has become heavily politicised.
In the United States, the Trump Administration launched a public- private partnership, Operation Warp Speed, to accelerate its hunt for Covid-19 vaccines, therapeutics, and diagnostics.
Big-pharma, universities and governments are competing to be first with a vaccine.
This week, details of a Covid19 vaccine trial by pharma giant Pfizer and BioNTech suggests it could be 90 per cent effective at
preventing the disease. New Zealand has signed up for enough doses of the Pfizer and BioNTech vaccine for 750,000 people.
Nair said on Friday that Stabilitech’s Covid-19 vaccine development was progressing well, and unlike the Pfizer vaccine, it would not have to be stored at ultra-cold temperatures.
Stabilitech’s oral vaccine would potentially ‘‘alleviate a lot of logistical challenges that are most significantly affecting developing and underprivileged communities’’, Nair said.
Despite the challenges of sourcing specialist equipment, upgrades to the BioCell facility were on track to be completed in early 2021.
‘‘At a time when suppliers in Europe and USA are reeling under lockdowns (and) various
restrictions which have drastically affected global supply chains and lead times it is challenging to get everything required in a short space of time.’’
Vaccinologist and associate professor at Auckland University Helen Petousis-Harris said investing in capacity to produce vaccines would benefit New Zealand in the long term.
‘‘We have had challenges for years with global supply. It’s a very high-risk game because you have to invest so much in development.
‘‘You have that capacity not just to serve your own population but also the wider Pacific nations as well.
‘‘The reality of emerging infectious diseases is we need to be a little bit nimble. This is a longterm thing.’’
‘‘We did hear that BioCell had got $3m and it was all news to us.’’ William Rolleston South Pacific Sera director