INTERVIEW: “The weekend’s protests were the Russian peoples’, not the opposition’s” – Maxim Reznik
Western Balkans citizens legally resident in EU equal to 14% of region’s population
International Ice Hockey Federation (IIHF) has stripped Belarus of the right to hold the World Championship this year
Alexei Navalny arrested on arrival as he returns home
Russia's NorNickel adopts blockchain for supply chain management
Russia goes ahead with eSIM technology
Russia's retailer X5 Group posts 13% sales growth in 4Q20
National Bank of Ukraine retains a key policy rate at 6%, the outlook of the CPI deteriorates
Western Balkans and Ukraine urged to scrutinise coal subsidies
Oligarchs trying to derail Ukraine’s privatisation programme, warns the head of Ukraine’s State Property Fund
VISEGRAD BLOG: Central Europe's populists need a new strategy for Biden
LONG READ: The oligarch problem
OUTLOOK 2021 Lithuania
EBRD says loan to Estonia’s controversial Porto Franco project was never disbursed
Czech MPs pass protectionist food law in violation of EU rules
M&A in Central and Eastern Europe fell 16% in value in 2020, says CMS report
Hungarian vehicle makers hit by supply chain shortage
COVID-19 and Trump’s indifference helped human rights abusers in 2020
OUTLOOK 2021 Poland
OUTLOOK 2021 Slovakia
BRICKS & MORTAR: Rosier future beckons for CEE retailers after year of change and disruption
FDI inflows to CEE down 58% in 1H20 but rebound expected
BALKAN BLOG: Superstition and resentment surround vaccination plans
Albania needs reforms for e-commerce to thrive, says World Bank
BALKAN BLOG: US approach to switch from quick-fix dealmaking to experience and cooperation
Bosnia's exports in 2020 amounted to BAM10.5bn, trade deficit to BAM6.3bn
Retailers and restaurant owners threaten protests in Bulgaria if reopening is delayed
Bulgaria's Biodit first company to IPO on new BEAM market
Bulgaria’s government considers gradual easing of COVID-related restrictions
Spring lockdown caused spike in online transactions in Croatia
ING: Growth in the Balkans: from zero to hero again?
Labour demand down 28% y/y in Croatia in 2020
Kosovo’s biggest opposition party risks being unable to run in general election
OUTLOOK 2021 Moldova
Storming parliaments: New Europe's greatest hits
World Bank revises projection for Moldova’s 2020 GDP decline to 7.2%
North Macedonia plans to cut personal income tax in IT sector to zero in 2023
Romania government to pursue “ambitious” timetable for justice reforms
Private finance mobilised by development banks up 9% to $175bn in 2019
OUTLOOK 2021 Romania
Slovenia’s economic sentiment indicator up 2.2 pp m/m in January
OUTLOOK 2021 Slovenia
Slovenia’s opposition files no-confidence motion against Jansa cabinet
Slovenia’s government to release funds to news agency STA after EU pressure
D’S Damat franchise deals ‘show Turkey’s hard-pressed mall operators becoming their own tenants’
Turkey’s benchmark rate held as concerns over faltering recovery come to fore
Turkish lira breaches HSBC’s stop-loss, Turkey ETF signalling outflows
CAUCASUS BLOG : What can Biden offer the Caucasus and Stans, all but forgotten about by Trump?
Armenia ‘to extend life of its 1970s Metsamor nuclear power plant after 2026’
OUTLOOK 2021 Armenia
COMMENT: Record high debt levels will slow post-coronavirus recovery, threaten some countries' financial stability, says IIF
OUTLOOK 2021 Georgia
Iran’s President Khamenei menaces private citizen Trump
Iran’s technology minister indicted for failing to properly implement internet censorship
No US move to rejoin Iran nuclear deal imminent, say Biden national security nominees
TEHRAN BLOG: Will Biden bet on a quick return to the Iran nuclear deal?
Central Asia vaccination plans underwhelm, but governments look unruffled
Fears of authoritarianism as Kyrgyz populist wins landslide and backing for ‘Khanstitution’
OUTLOOK 2021 Mongolia
Mongolia's PM quits amid protests over treatment of mother with coronavirus and newborn baby
Mongolia's winter dzud set to be one of most extreme on record says Red Cross
Mongolian coal exports to China paralysed as Beijing demands virus testing of truck drivers
OUTLOOK 2021 Tajikistan
OUTLOOK 2021 Turkmenistan
Turkmenistan: How the Grinch stole New Year
COMMENT: Uzbekistan is being transformed, but where are the democratic reforms?
Download the pdf version
Russia was widely criticised when it was the first in the world to register the Sputnik V anti-coronavirus (COVID-19) vaccine in August, accused of rushing through the approval for political gain.
Since then, the whole development of the vaccine has been dogged by Schadenfreude as the press leapt on any signs of impropriety in the data and Russia has even been accused of stealing the technology.
But the markets jumped when the US pharmaceutical giant firm Pfizer, together with the German research company BioNtech, stated their version of the vaccine has a 90% efficacy, and investment banks immediately upgraded their 2021 outlooks for a scenario where some sort of normality returns.
In the meantime, Sputnik V’s clinical Phase III trials are half way through and no major problems with Sputnik have been thrown up yet. About half of the 40,000 volunteers in the trial have been given both shots to no major ill-effect. And the day after Pfizer’s announcement, the producers released preliminary results that show Sputnik V has a 92% efficacy.
“Everyone is sick and tired of all the COVID news flow in recent months but there has already been a lot of progress already made in the vaccine – and I’m not talking about US vaccine,” Sofya Donets, Renaissance Capital’s Russia and Commonwealth of Independent States (CIS) economist, said during the bank’s 25th anniversary investment summit last week. “In Russia we already have two vaccines that are registered: one back in August and then again in October. They will be ready soon for large-scale production.”
Donets is already including a scenario where mass vaccinations takes place and that pandemic fades away in the first half of next year.
“40,000 volunteers were already vaccinated during the testing period. By the end of this year producers are ready to supply 5-6mn doses per month and by spring officials report that will go up to 15mn per month: enough to vaccinate all Russians over the age of 60 in two months,” says Donets.
Russia Inc. goes into Big Pharma
Put aside for a moment the political one-upmanship that has dogged the global search for medicine to deal with a killer illness. Once the hype ends the business will begin. And this is going to be a very big business indeed.
Estimates of the value of the coronavirus vaccine market vary wildly with figures from $25bn to $100bn being bandied about. But clearly it will be worth multiple billions of dollars. And whoever gets a working vaccine to market first will capture a large slice of that money.
Kirill Dmitriev, the CEO of the sovereign wealth fund, the Russian Direct Investment Fund (RDIF) that financed much of the Sputnik V research, says he thinks Russia will control about a third of the eventual 3bn-5bn dose market. If that is true, then coronavirus vaccine exports will earn Russia as much as it gets from exporting grain or arms – and Russia is a global leader in both those export categories.
Russia Inc. as a Big Pharma concern is not exactly an image that we are used to, but given its prowess in the other sciences it certainly has the intellectual capital that could produce a working vaccine.
The problems Russia will face going forward will be ones of business. Production is already proving to be a major headache. Donets’ estimate for 5-6mn doses a month is already down on earlier predictions that 10mn doses would be produced by Christmas and the 15mn doses a month that could be produced in the first half of next year is half the earlier forecasts.
Last month, the RDIF said that it is currently investing into production facilities and will be able to produce 30mn doses by the end of this year and up to 200mn doses a year starting in 2021, but clearly it is not going as fast as the sovereign wealth fund had hoped for.
In mid-October, Industry Minister Denis Manturov, in an interview with Bloomberg, called these promises "nonsense." “The main challenge now is to scale production,” he said. "It is impossible to produce 30mn doses by the end of the year." The updated forecast of RDIF is 7-10mn doses of vaccine in December-January – and even this estimate is in doubt.
Nevertheless, millions of doses will be produced and the volume will rise rapidly as the problems are ironed out. With some $10bn of assets under management and the power of the Kremlin at its back the RDIF is not short of money or resources.
But Russia is. It doesn't have a well-developed and diversified pharmaceutical industry like that in the US that can be raided for resources and manpower.
However, Russia is doing a lot better on the distribution and marketing fronts. One of the big problems with the Pfizer vaccine is that it needs to be kept very cold.
Anthony Fauci, director of the US National Institute of Allergy and Infectious Diseases, said on November 11 that the distribution of Pfizer’s messenger RNA-based technology in developing countries is going to be “difficult” because it needs to be kept at -70C (-94F).
“It does have cold-chain challenges as it were. In a country like the UK and the United States we can address them and it still would be challenging; but probably much more challenging in countries in the developing world,” Fauci said at the Financial Times’ global pharmaceutical and biotechnology conference.
The Russian version has none of these problems, as it can be kept at room temperature.
The extreme cold storage will also make the Pfizer drug a lot more expensive.
Russian investment bank BCS Global Markets estimates that possible pricing of the vaccine for sales abroad could vary at about RUB300-1,000 per dose ($4-14), which is a fraction of estimates by the Financial Times of planned vaccine prices by foreign pharma majors’ leading candidates: Moderna $25-30/dose, Pfizer/ BioNTtech $19.5 and AstraZeneca $3-4, although the last is on a par with the Russian cost.
Russia is also well ahead on the marketing and sales. In August almost immediately after Sputnik V was registered, the producers signed a deal with Kazakhstan to supply several million doses as soon as clinical trials were over.
Uzbekistan has also signed a deal with Russia for 30mn doses, as have several BRIC countries. In all, some 50 countries have reportedly signed some sort of deal with Russia to buy its vaccine. For countries like Kazakhstan and Uzbekistan driving vaccine doses around their huge countries that have to be kept at -70C is a non-starter. Plus following its “Moscow consensus” ideology the Kremlin will package sales of vaccine doses together with other things like energy and politics to make up an offer that appeals to countries like these that a commercial entity like Pfizer can’t match.
“We expect that Russia will move on domestic vaccine and will already start exporting the vaccine in the first half of 2021. 20 countries are in discussions with Russian producers,” says Donets. “The India potential contract is for 100mn doses as well as LatAm countries [and] as well as Russia’s regional neighbours.”
Just these named deals add up to something around $500mn, which is half of the RDIF’s Dmitriev’s guess that Russia could take $1bn of the total $3bn-$5bn market.
here to continue reading this article
and 5 more for free or purchase
12 months full website access including
the bne Magazine for just $250/year.
Register to read the bne monthly magazine for
Password could contain only
and have 8-20 symbols length.
Please complete your registration by confirming your
A confirmation email has been sent to the email
address you provided.
can't be empty.
No user with
this email address.
Access recovery request has expired, or you are using
the wrong recovery token. Please, try again.
Access recover request has expired.
Please, try again.
To continue viewing our content you need to complete
the registration process.
Please look for an email that was sent to
with the subject line
"Confirmation bne IntelliNews access". This email will have
instructions on how to complete registration
process. Please check in your "Junk" folder in
case this communication was misdirected in your
If you have any questions please contact us at email@example.com
Sorry, but you have used all your free articles fro
this month for bne IntelliNews. Subscribe
to continue reading for only $119 per year.
Your subscription includes:
For the meantime we are also offering a free
digital weekly newspaper to subscribers to
the online package.
Click here for more subscription options,
including to the print version of our
flagship monthly magazine:
Take a trial to our premium daily news
service aimed at professional investors that
covers the 30 countries of emerging
For any other enquiries about our
products or corporate discounts please
contact us at
If you no longer wish to receive
Magazine annual print
Website & Archive
Combined package: web
access & magazine print
Take a trial to our premium daily news service
aimed at professional investors that
covers the 30 countries of emerging Europe: