Dear readers,

Who will get immunised first — or at all — is a hot topic of conversation worldwide. Vaccine shortages add to the uncertainty. Covid-19 shot manufacturers such as Pfizer are hitting production limits. But in Asia, Chinese vaccine makers have no problem meeting demand.

State-owned Sinopharm and Sinovac have shipped more than 20m doses to developing countries including Turkey, Brazil, the Philippines and Thailand. The two businesses have signed deals to provide hundreds of millions of further doses. More than 15m shots have been administered in China, according to the National Health Commission.

Conflicting data surround CoronaVac, made by Sinovac. Initial trials reported a general efficacy rate of 78 per cent. Two doses induced the immune response, according to peer-reviewed papers.

Interim results from a smaller, late-stage trial in Turkey — where CoronaVac has been purchased for more than half of its population — found the vaccine to be 91 per cent effective.

But data from a Brazil trial of 12,500 people showed a lower general efficacy rate of about 50 per cent. That falls below the levels of global peers such as BioNTech/Pfizer, Moderna and Oxford/AstraZeneca.

That lower rate — which means the vaccine stops half of those who take the shot from getting sick — reflects the science behind the jab. CoronaVac uses inactivated virus, as conventional influenza vaccines do. Flu jabs have efficacy rates of about 50 per cent. The BioNTech/Pfizer and Moderna vaccines use messenger RNA genetic material to trigger a more reliable immune response.

Health authorities will deploy CoronaVac widely in Indonesia and Turkey in the coming weeks. Those immunisation campaigns should produce plenty of real-world data.

Even without those results, demand for CoronaVac will stay high. For the hardest-hit countries, especially in the developing world, it is the only option. They need speedy access to vaccines to slow the spread of the virus and forestall new strains. Developed nations have largely cornered supplies of mRNA vaccines.

Column chart of Confirmed number of doses purchased by country income level classification (million) showing Poorer countries fall behind in race for vaccines

For hotter countries, such as Thailand and Indonesia, CoronaVac offers distribution advantages over the Moderna and BioNTech/Pfizer shots. The latter needs to be transported at minus 70C in dry ice shipping containers. CoronaVac can be stored between 2C and 8C.

Indonesia is made up of 17,000 islands with residents spread across 6,000 of them. Transport is unreliable. Flights and road journeys are long.

For Sinovac, growing demand and the relatively high price, of $60 for two doses, will boost its top line. The market for cheap influenza vaccines stands at $4bn a year. About 40 per cent of the population take the flu shot in countries such as the US.

It is expected that 70 per cent of a population will have to get a Covid-19 jab to foster herd immunity. Many experts believe the Covid-19 virus is here to stay. Vaccine makers will benefit from a hefty recurring source of revenue.

Shares of Sinopharm have started to reflect those expectations, up about 30 per cent from March lows. Sinovac is valued at more than $3bn — six times its market value last year, after Sino Biopharmaceutical acquired a 15 per cent stake in a subsidiary.

There is room for more gains in the sector as clinical trials wrap up at local rivals such as CanSino Biologics and Shenzhen Kangtai which are close to bringing their own products to market. Investors will benefit from the new market in Covid-19 vaccines long after the pandemic is over.

Enjoy the rest of your week.

June YoonLex writer