Omicron Variant’s Information Vacuum Whipsaws Markets

(Bloomberg) -- A rift among drugmakers over just how well Covid-19 vaccines will work against the omicron variant jostled global markets Tuesday, in a reflection of how an information vacuum around the new pathogen is creating fresh anxiety about the pandemic.

Pharma executives and other experts lined up to say there’s little evidence so far that the newly discovered variant will erode the protective power of Covid-19 shots.

The University of Oxford, which helped develop the widely used vaccine sold by AstraZeneca Plc, said there’s no indication that existing shots won’t provide some protection against it. Additionally, the head of BioNTech SE, Pfizer Inc.’s vaccine partner, told the Wall Street Journal that the current crop of shots is likely to shield against severe disease in people infected with the variant.

Those remarks followed comments from Moderna Inc. Chief Executive Officer Stephane Bancel, who said the surprising number of mutations in omicron suggested new shots would be needed to keep it from infecting people.

Bancel’s warning helped knock stock markets back on their heels, after a recovery Monday from a sell-off last week precipitated by the discovery of omicron by scientists in South Africa.

Quick Discovery

The S&P 500 fell 1.5% as of 3 p.m. in New York. Moderna fell 3.8%, while Pfizer rose 2.7% and BioNTech’s American depositary receipts lost 2.4%. AstraZeneca closed down 1.1% in London. 

The apparently quick discovery of omicron has cheered some public-health experts who say that it gives time for scientists and policy makers to study it and prepare appropriate countermeasures. But it also has created a knowledge gap while omicron remains under the microscope, making markets especially sensitive to any new commentary that suggests the variant could be a threat to global growth.

“There are so many mutations in the spike protein and that is the target for the antibody response,” said Stanley Perlman, a coronavirus researcher at the University of Iowa. Omicron features at least 30 mutations in its spike protein. Some are in crucial regions of the spike, including the receptor binding domain that latches onto human cells, and many aren’t present in other major variants.

Sheer Numbers

That suggests the strain could evade antibodies produced by existing vaccines, while being equally or more transmissible than delta, the strain that currently dominates. But little is known for sure about omicron, as the variant is so new that scientists haven’t had a chance to complete their studies. 

While the sheer number of mutations looks bad on paper, whether they add up to a more dangerous virus is unknown until more detailed analyses are done, Perlman said. 

Researchers will have a much better view of the variant in two to four weeks, said Anthony Fauci, the head of the U.S. National Institute of Allergy and Infectious Diseases and President Joe Biden’s chief medical adviser, cautioning against depending on premature, scant data. 

“Be careful about breadcrumbs; it may not tell you what kind of loaf of bread you have,” he said. “Because we really don’t know.”

For example, while coronavirus cases have risen in South Africa as omicron took over, that’s just one country, and it started from a low base. There’s a good reason to wait before making confident predictions: A little less than a year ago scientists were worried about an immune-evading strain called beta that appeared in South Africa. But it didn’t spread as well as delta and never took off in most other countries. 

Far-Reaching Consequences

So far, there are 205 confirmed omicron cases globally in 18 countries, Fauci said. While it’s possible it’s more transmissible than delta, “we do not know until we see the dynamics,” he said. However, some data suggests that vaccination plus boosters provide “at least some degree of cross-protection, particularly against severe disease,” he said.

Scientists will get answers fairly quickly to the immune evasion question, as that can be tested in the lab. It will likely take two to three weeks to test antibodies from the blood of people vaccinated with the current shots in the test tube to see how well they neutralize the new omicron strain, according to researchers from Pfizer and Moderna. That will provide a much better indication of whether a vaccine update is needed, should omicron take hold in multiple countries.

“That is a critical experiment that is ongoing now that will also take a couple weeks,” said Paul Burton, Moderna’s chief medical officer. “The decisions that are going to be made based on all of these data will have fundamental, far-reaching consequences.”  

While there may be a decline in ability of the current vaccine to neutralize omicron, he said he doesn’t expect that the antibody protection “will go to zero” with the current vaccines against the new variant. “There will definitely be some protection, for sure,” he said.

Meanwhile, there have also been reports that initial omicron cases in South Africa were mild. But that is also been based on too small a sample size to reach any conclusions, researchers say. Fauci said he and CDC Director Rochelle Walensky asked South African counterparts about what the severity appears to be, and they agreed it’s too early to tell.

Whether or not a vaccine update is needed right away to fight omicron, the continued evolution of ever more Covid-19 variants is a clear sign that vaccine updates will be needed eventually, said Pfizer research chief Mikael Dolsten. 

“Sooner or later the variant of concern is likely going to reduce vaccine protection,” and a new formulation will be needed, said Mikael Dolsten, Pfizer’s research and development head, in an interview on Monday. “Right now we don’t know whether that is the case for omicron.”

While companies wait for clarity on how omicron will spread and whether it will evade existing vaccines, they are moving ahead with the process for producing an omicron-targeted shot. The new variant’s genetic profile is well known, making it a relatively straightforward process to modify vaccines to fight it -- one that should go significantly faster than annual updates to the flu shot.  

Pfizer and Moderna both have already started working on omicron customized shots and have said they could have new omicron-specific vaccines ready for authorization in about three months, should they be needed.  

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