ESG Case Study:
Reed Smith advises Gavi, the Vaccine Alliance on groundbreaking malaria vaccine financing agreement
Malaria is a huge global health challenge and a primary cause of childhood illness and death in sub-Saharan Africa. In 2019 alone, the devastating disease cost the lives of an estimated 409,000 people.
Resulting from over 30 years of research, GlaxoSmithKline (GSK) developed the first-ever malaria vaccine to be proven safe and effective in Phase 3 clinical trials. These trials began in 2019, and the vaccine went on to be piloted in immunization programs in Ghana, Kenya and Malawi.
However, in order for the vaccine to become available for widespread use, it required approval from the World Health Organization (WHO) based on the pilot data. There was significant uncertainty around funding and production ahead of this critical WHO decision, expected, at the earliest, in late 2021.
Gavi, the Vaccine Alliance (Gavi) is a global public-private partnership that has helped vaccinate half the world’s children against some of the world’s deadliest diseases. Gavi’s aim was to open a malaria funding window and finance the deployment of the malaria vaccine to millions of people as soon as it was approved by the WHO and Gavi. However, with the crucial WHO approval not expected for several months, Gavi officials wished to address the associated uncertainty around future production, worried that the regulatory pause would trigger lengthy production delays of the vaccine antigen that in turn would jeopardize mass deployment, at a potential cost of many thousands of lives.
In partnership with GSK and MedAccess, a UK-based social finance company that works to make medical supplies more widely available in underserved markets, Gavi agreed to an innovative financing solution that guaranteed continued production of the antigen used in the malaria vaccine.
Gavi agreed to fund GSK’s continued manufacturing of the antigen for up to three years. If Gavi decided to approve a malaria vaccination program after a positive WHO recommendation, GSK would credit the value of the Gavi-funded costs toward procurement of finished doses for the program. If Gavi decided not to open a funding window for the program, MedAccess would compensate Gavi for the majority of costs incurred to that point.
The Reed Smith team drafted and negotiated the transaction between Gavi and GSK and negotiated the agreement between Gavi and MedAccess.
Announced on August 4, 2021, this innovative agreement prevented a shutdown of GSK’s facility, allowing a stockpile of the antigen to be produced ahead of the WHO decision. This ensured that availability would not be a barrier to the rapid rollout of the vaccine.
MedAccess estimated that the vaccine could reach up to 7.5 million more children as a result of avoiding delays to production.
On October 6, 2021, the WHO announced it was recommending the widespread use of the vaccine. Dr. Tedros Adhanom Ghebreyesus, director-general of the WHO, called it “a historic moment,” commenting that the vaccine, used alongside existing malaria-prevention tools, could save tens of thousands of young lives each year.
The Reed Smith team:
The London-based team was led by finance partner Andrzej Janiszewski and corporate partner Sakil Suleman, supported by lead associate Kelly Knight.Comment from Dr. Seth Berkley, CEO of Gavi, the Vaccine Alliance:
“Malaria kills over a quarter of a million children every year; this vaccine has the potential to have a real impact on this toll. That’s why it is vital that we keep production lines running while waiting for important decisions around its global availability. This is innovative financing at its best: tackling risk and uncertainty to ensure access to what could be an important additional tool in the battle against malaria.”
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