In mid-January, Kirill Dmitriev – the 45-year old CEO of the $10-billion state-owned Russian Direct Investment Fund (RDIF) – received a phone call from a close friend in China. It was businessman Wang Jian.
Jian, the chairman and co-founder of BGI Group, one of the leading companies in the world in sequencing human genomes, was in Wuhan attempting to use the genetic information captured from samples of the SARS-CoV-2 virus to develop the first diagnostic tests for what would soon become known as Covid-19. Jian warned that the situation in Wuhan was serious and could escalate into a global crisis. “After this conversation, I became frankly, one of the most paranoid people about Covid-19 in top Russian circles,” Dmitriev says.
As one of the best-connected individuals in Russian politics, Dmitriev’s concerns held considerable sway. A Harvard-educated former investment banker, married to a friend of president Vladimir Putin’s daughter, Dmitriev had been appointed as the head of RDIF in 2011 with the goal of making the Russian economy less dependent on oil.
Within days of speaking to Jian, Dmitriev began focusing RDIF’s investment strategies on tests, treatment ideas, and in particular, potential vaccines for Covid-19. After assessing more than 20 vaccine candidates inside and outside of Russia, he decided to back a strategy pursued by virologists at the Moscow-based Gamaleya Research Institute.
During the 1950s, Gamaleya scientists began studying how bacteria and viruses interact with the human body, as part of a program designed to counteract potential biological weapon attacks. While this program ceased following the end of the Cold War, the institute now utilises the virological knowledge accrued during the Soviet era to develop vaccines. In particular, Gamaleya scientists have created a vaccine platform using human adenoviruses – common viruses which most of us are exposed to – as vectors for delivering genes from a novel virus like SARS-CoV-2 into the body, stimulating it to produce antibodies against those viral proteins.
While other pharmaceutical companies, such as Johnson & Johnson and CanSino, are also developing Covid-19 vaccines using human adenoviruses, Gamaleya’s scientists use two adenoviruses (rAd26 and rAd5) instead of one, a technique which they claim elicits a stronger immune response.
Over the past 39 years, the institute has used this platform to develop various vaccines, most recently for Ebola and MERS. Turning the existing MERS vaccine into an inoculation for Covid-19 required substituting a gene that codes for the MERS spike protein with one for SARS-Co-V-2. “It wasn’t like we came up with some crazy vaccine from the beginning,” says Dmitriev. “The Gamaleya scientists already had a product for MERS, which had been validated and worked on for six years. And this human adenoviral platform has been really studied for decades, and proven to be safe in 250 trials.”
Dubbed Sputnik V, after the Soviet era space program, the vaccine was entered into clinical trials for Covid-19 in the spring. Last month, like the Pfizer/BioNTech, Moderna, and AstraZeneca vaccines, it reported successful results from an ongoing Phase III trial. A press release on November 24 – eight days after Moderna’s announcement – described an efficacy of 91.4 per cent on an interim analysis of 18,794 participants. According to the RDIF, there are now 1.2 billion confirmed orders of Sputnik V in more than 50 countries around the globe.
But Sputnik V has also been a source of controversy. In August, Russian regulators licensed the vaccine for a limited rollout, before Phase I/II safety data had even been published. While this data only became available on September 4, Putin had already released a statement on August 11 declaring Sputnik V as the world’s first approved Covid-19 vaccine, and making the jab available to the Russian public. By November, 100,000 Russians at higher risk of severe coronavirus infections had received the vaccine. While no side effect concerns have been officially reported in these volunteers, this was a brazen move: no other regulator has approved a Covid-19 vaccine before the release of Phase III efficacy data.
Dmitriev insists that Russia felt able to issue early approval for Sputnik V because it was already confident that the adenovirus platform was safe, but many scientists perceived the decision as reckless. Ayfer Ali, a pharma and biotech researcher at Warwick Business School described Russia as “essentially conducting a large, population level experiment.” For others, this is a case of vaccine nationalism.
“By coming first saying, ‘I was faster than everybody else,’ Russia is basically making a political statement through scientific engineering,” says Mathieu Boulègue, who researches Russian domestic and foreign policy at the Chatham House international affairs think tank. “They’re saying, ‘We’ve won in this race, over the US, over the best minds of the world’.”Boulègue points to how the RDIF has aggressively promoted Sputnik V. So far, it is the only Covid-19 vaccine with both a dedicated website and Twitter account, one which takes potshots at media outlets for reporting ‘fake news’, and continually compares itself to rival vaccines on efficacy and price.
Dmitriev – who came under criticism earlier this year for repeatedly describing the AstraZeneca vaccine, which uses a similar platform, but with a chimpanzee adenovirus, as the “monkey vaccine” – is unashamed of this bombastic approach, instead blaming other pharma companies for attacking Sputnik. “There are a lot of attacks on the Russian vaccine,” he says. “We are a player who is new to the pharma industry, having a good product but having to overcome this really negative perception of Russia, frankly fueled by competitive spirits of other pharma players.”
But for some scientists, Russian PR stunts have fuelled fears about whether the vaccine is genuinely as efficacious as its press release maintains. “I do feel worried about an apparent lack of transparency as regards the data,” says Sheena Cruickshank, an immunologist at the University of Manchester. “To my knowledge, the Phase III interim data has not been shared beyond something I saw in a newspaper. It is hard to say how effective it is without seeing a larger set of data, especially data taken from patients who developed Covid in placebo versus vaccinated groups.”
Others believe that the early approval obscured what actually appears to be sound vaccine science. “Approving it early hasn’t helped the image,” says Brendan Wren, a microbiologist at the London School of Hygiene and Tropical Medicine. “But I don’t actually understand a lot of the adverse comments about Sputnik V. The vaccine is very similar to the Oxford-AstraZeneca system in that it uses an adenovirus as the carrier of the spike protein. So it’s not surprising that it has proved effective.”
Western scepticism, however, may not really matter when it comes to determining Sputnik’s commercial success. While RDIF has declared itself open to partnering with other pharma companies like AstraZeneca – as part of vaccine cooperation schemes in which patients would receive different vaccines for their first and second shots – the west was never the main target market for Russia’s vaccine program.
Instead, as indicated both by the price point of Sputnik V – at £15 for two doses, it is cheaper than both Pfizer and Moderna, although not AstraZeneca’s which at £3 per dose is being produced on a not for profit basis – and its design, it is aimed primarily at low-income nations. While Pfizer and Moderna’s vaccines have to be stored at ultra-cold temperatures, Sputnik V is available in a freeze-dried form, with a stable temperature range of 2°C to 8°C, making it far easier to transport across the developing world. Phase III clinical trials of Sputnik V are underway in Belarus, Brazil, Venezuela, and other nations, with orders already in the pipeline.
According to the website Statista, so far Brazil has ordered 50 million doses of Sputnik V, Uzbekistan has ordered 35 million doses, and Mexico 32 million doses. Other countries, such as Turkey, are still weighing up whether to use the vaccine or not.
Boulègue believes this is no accident. “Russia has learned over the years that there’s no such thing as a small victory when it comes to scoring points politically,” he says. “Here they’re sending the message to these countries that Russia’s here to help, because we’re going to distribute very cheap, efficient vaccines. This makes sense because when you’re a low-income nation, you want to buy cheap, and buy a lot. So Russia will ship them all these vaccines with big Russian flags on them, saying ‘We’re your friends.’”
This dovetails nicely with Russia’s foreign policy over the past ten years. Around the time Dmitriev was appointed CEO of RDIF, Russia was beginning a drive to diversify its economic activities away from its traditional strongholds of arms exports and oil. This change in strategy was initiated by Russia’s state-owned tech conglomerate Rostec, an organisation led by former KGB officer Sergey Chemezov, who worked alongside Putin in Eastern Germany in the 1980s.
Following the introduction of western sanctions in 2014 after Russia’s annexation of Crimea, Rostec began to invest more heavily in developing critical technologies such as medical devices and pharmaceutical products. This fulfilled two needs: making Russia less reliant on imports, and creating a new production niche for the Russian army, the nation’s largest civilian employer. “It’s the Chinese logic that a military production chain can equally produce a tank and a ping pong table,” says Boulègue. “Russia began looking at this model, and saying, it’s actually not that stupid.”
Exporting cheap but efficient pharmaceutical products also represented a new way for Russia to reach parts of the world where there is low domestic pharma expertise, and a rapidly growing consumer market, such as parts of Latin America, and Africa.
Over the past five years, the Russian business elite have been increasingly turning their attention towards trade deals with Africa. In October 2019, 43 African leaders were invited to the first ever Russia-Africa Summit in Sochi; well before Covid-19, plans were underway to double the volume of Russian foreign trade with African nations to $40 billion over the next three to four years.
Now, the vaccine race and Sputnik V has handed Russia a golden opportunity to forge new ties in Africa. With the US and the European Union buying up hundreds of millions of vaccine doses, and the World Health Organisation’s Covax program only supplying sufficient supplies for 20 per cent of the African population, there is a void in the continent’s Covid vaccine requirements. While Dmitriev says that Russia is purely focused on trying to tackle the global health crisis and help return the world economy to normal, rather than looking for future trade opportunities, Russian commentators see this as part of RDIF and the Kremlin’s strategic goals.
“Here there is a brilliant opportunity that presents itself, for Russia to position itself to these countries as a great scientific nation,” says Alexander Gabuev, a researcher at the Carnegie Moscow Center. “If the Russian vaccine proves efficient, that might open some goodwill for more commercial deals and contracts.”
But Russia will not have things entirely its own way. China has similar plans for targeting low-income nations across Asia, Africa and Latin America with its own state-sponsored vaccines. This places Russia in a somewhat awkward position, as it is partially reliant on Chinese factories to produce the 1.2 billion doses of Sputnik V it has committed to supply. As a result, Moscow is also turning to India, and its substantial and well established vaccine production chain.
In October, RDIF signed deals with Indian pharmaceutical companies Dr Reddy’s and Hetero to manufacture and distribute 200 million doses of Sputnik V. This symbolises growing political ties between the two countries, which have arisen in the wake of increasing tensions with China. “It’s a complicated situation for Russia, because they need the manufacturing assistance from China but there’s also more competition than co-operation because China is also looking to sell Covid-19 vaccines to many of the same countries,” says Boulègue.
“Russia needs to be careful about Chinese corporate espionage, and even receiving spoiled vaccine batches, so they’re reaching out to India. But at the same time they can’t go entirely towards India, because China is a valuable partner for them for energy exports. It’s very politically sensitive for the Kremlin.” (India and China are currently gridlocked in a low-level military standoff along their shared border.)
But such is the need for vaccines across the developing world, that Boulègue predicts both China and Russia will ultimately succeed in exporting many millions of doses of vaccines to low-income nations all over the globe.
“It’s all going to be very political. There’s no such thing as a free business competition here because it is dealt at the highest level of state,” he says. “So because Russia’s been developing a lot of cooperation with the Central African Republic, they will likely get Sputnik V there first, and China will probably have limited shares. They will probably share the spoils in a country like Indonesia where there’s a market for both, and China will score bigger in other African countries which they’ve been lavishing with contracts and money.”
Such vaccine diplomacy could shape many of the power dynamics between Russia, China, and Africa for many years to come. Boulègue points out that once Russia and China have established footholds in Africa, they can slowly increase their leverage to export more goods, and ensure better deals for themselves. “Once they have this relationship, they can extort whatever they want,” he says.
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