The positive clinical data from AstraZeneca Covid-19 vaccine trial should bring cheer to India. However, AstraZeneca vaccine will be able to vaccinate only 50% of the population by the end 2022, even if there are no supply/ funding constraints, according to Jefferies. A 70% efficacy with AstraZeneca would further delay the time to bring the Pandemic under control in India. High unmet demand leaves potential for other vaccine plays in India. Remdesivir could also see extended sales for Cipla and Cadila Healthcare.

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Leaves room for other vaccine players in India, Cadila Healthcare and Dr Reddy's in fray:

The current capacities will only be able to immunize less than half of the population by end and this is provided AstraZeneca / Serum Institute are able to sell all the supplies committed to India. As per reports, Government of India plans to pay USD 3 per dose (USD 6 per patient) and has set aside USD 7 bn for immunizing Indians against Covid-19. Jefferies believes Moderna and Pfizer vaccines will have a limited role to play in India due to their high cost as well as requirement of cold chain with Pfizer vaccine.

47% of population could be immunized by end-2022, despite AstraZeneca data and supply assurance:

AstraZeneca vaccine should get through to 47% of India's population by the end 2022. AstraZeneca manufacturing partner has committed at least 50% of its capacity to India. The company plans to have a stockpile of 100 mn vaccines by end 2020 which can be used to immunize healthcare workers and high risk groups once the product gets approval in India. Serum is scaling up capacity to 100 mn doses a month by early next year. After the AstraZeneca data available today, Jefferies sees high probability of India approval by end Jan 2021.

70% efficacy will further delay time to control pandemic in India, although data can't be compared to other vaccine trials:

AstraZeneca has shown 70% efficacy in its vaccine trial data. This implies that the vaccine will provide immunity to only 70% of patients who get immunized. Moderna and Pfizer have shown better efficacy at 90-95%, but Jefferies says its colleague Peter Welford noted here that vaccine results may not be exactly comparable due to difference in trial protocols with AstraZeneca choosing a more stringent efficacy criteria.

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Remdesivir could have extended sales in India, though with a finite time frame:

Remdesivir has become a meaningful product for Cadila Healthcare, Cipla and to a smaller extent Dr Reddy's Labs. In Q2 FY21, Cadila Healthcare and Cipla India revenues grew at 11%/20% vs flat revenues for peers such as Sun Pharma and Lupin which don't have Remdesivir or other covid products in their portfolio. Jefferies believes these sales would continue till end 2022 even if another vaccine is added to Indian vaccination arsenal. More affordable segment of the population will likely get immunized first which will start tapering Remdesivir sales in the private market from end 2021 onwards.