Accelerating Vaccine Innovation for Emerging Infectious Diseases via Parallel Discovery

Joseph Barberio, Jacob Becraft, Zied Ben Chaouch, Dimitris Bertsimas, Tasuku Kitada, Michael Lingzhi Li, Andrew Lo (), Kevin Shi and Qingyang Xu

No 30126, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: We analyze the financial performance of a hypothetical portfolio of 120 mRNA vaccine candidates in the preclinical stage targeting 11 emerging infectious diseases. We calibrate the simulation parameters with input from domain experts in mRNA technology and an extensive literature review. We find that the portfolio generates an average annualized return on investment of –6.0% per annum and a net present value of –$9.5 billion, despite the scientific advantages of mRNA technology and the financial benefits of diversification. Clinical trial costs account for 94% of the total investment, with manufacturing costs accounting for only 6%. Sensitivity analysis reveals that the most important factor determining financial performance is the price per dose, while the increased probability of success due to mRNA technology, adjusting the size of the portfolio, and the possibility of conducting human challenge trials do not significantly improve financial performance. These results underscore that if the goal is to create a sustainable business model and robust global vaccine ecosystem, continued collaboration between government agencies and the private sector is likely to be necessary.

JEL-codes: G11 G18 G24 G31 G32 H12 H23 H4 H51 H75 I11 I13 I15 I18 (search for similar items in EconPapers)
Date: 2022-06
New Economics Papers: this item is included in nep-dem
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Citations: View citations in EconPapers (3)

Published as Accelerating Vaccine Innovation for Emerging Infectious Diseases via Parallel Discovery , Joseph Barberio, Jacob Becraft, Zied Ben Chaouch, Dimitris Bertsimas, Tasuku Kitada, Michael L. Li, Andrew W. Lo, Kevin Shi, and Qingyang Xu. in Entrepreneurship and Innovation Policy and the Economy, volume 2 , Jones and Lerner. 2023

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Chapter: Accelerating Vaccine Innovation for Emerging Infectious Diseases via Parallel Discovery (2022)
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