From his baronial boardroom in Pune, Adar Poonawalla can look out upon the perfectly manicured turf of India’s biggest stud farm. Over the years, the family’s racehorses have won the Indian Derby 10 times. These days, however, the thoroughbreds gambolling across the paddock beneath his window may be the last thing on his mind.
Poonawalla is chief executive of Serum Institute of India (SII), now the world’s largest manufacturer of Covid vaccines, which has been running full tilt to produce 50m doses per month of the AstraZeneca/University of Oxford jab.
But the company has found itself at the centre of Britain’s first stumble in the race to vaccinate its population after 5m doses that it was meant to deliver in March now face delays.
Since the New Year, almost 25m Brits have had the jab – but NHS England has warned the delay will result in a slower pace of vaccinations in April.
Poonwalla told The Telegraph that the Indian government was to blame, temporarily holding exports as it decides on how to deal with a resurgence in Covid infections: “It is solely dependent on India and it has nothing to do with the SII,” he said. “It is to do with the Indian Government allowing more doses to the UK.”
The delay is yet another sign of so-called “vaccine nationalism”, whereby countries are being accused of hoarding supplies in a bid to inoculate their populations first. It follows the EU, where inoculations are proceeding at a slow pace, threatening a ban on exports of vaccines to Britain – as well as member countries raising disputed concerns over the safety of the AstraZeneca jab.
Speaking in an interview with The Telegraph in January, Poonawalla nodded to the divided loyalties of vaccine manufacturers between governments who have ordered doses and their own countries: “Everyone has worked tirelessly for months on end… The real challenge now is rolling it out to all the countries worldwide but also balancing our commitments domestically and understanding what my government [India] wants us to do. It’s a fine balance.”
The story of how an Indian family of racehorse breeders became the world’s vaccine kings, fighting off stiff competition from some of the world’s biggest companies like GlaxoSmithKline and Pfizer, is as curious as it is remarkable.
Founded in 1966 by his now 80-year-old father Cyrus Poonawalla, chairman of the family’s Poonawalla Group holding company, until recently SII was little known outside India and the highly specialist world of vaccine manufacturing. But the company, which since March has signed manufacturing deals with five pharmaceutical companies including Britain’s AstraZeneca and America’s Novavax and is producing at least 1bn Covid vaccine shots, now finds itself playing a central role in the battle against the virus.
While Western drug giants like Pfizer, Moderna, AstraZeneca and universities like Oxford have cracked the vaccine technology, the daunting logistical task of physically manufacturing enough doses – especially for the giant populations of developing countries in Asia, Africa and Latin America – has fallen to a large extent on the shoulders of SII.
“I have partners and funders, and a lot of people to keep happy,” says Poonawalla, who received the jab this month. “Everyone is anxious and feels they deserve it [as a] priority.”
Either way, it’s fair to say the Poonawalla family, which well before coronavirus hit was already one of India’s wealthiest business groups, has had an extraordinary year. Over the past year Cyrus Poonawalla’s estimated net worth jumped 87pc to $16.4bn (£12bn) this month making him India’s sixth richest man, according to Bloomberg.
A flamboyant figure with a love of parties, horse racing and the owner of a large classic car collection, the lion’s share of his wealth – about $15.5bn – is tied to his stake in SII. He owns $960m in real estate and other assets.
Manufacturing vaccines at scale is a highly complex and technically challenging process, requiring rigorous manufacturing standards and frequent testing. Today, as well as Covid vaccines, the family’s factory in Pune produces 1.5bn doses a year of vaccines for use in 170 countries to protect against diseases including polio, measles and influenza. SII claims 65pc of the world’s children receive at least one vaccine produced by it.
When it started in the Sixties, however, it was just a scrappy veterinary clinic on the edge of the family’s stud farm in Pune, India’s eighth biggest city. Cyrus launched SII with a $12,000 investment because he wanted to diversify away from horse-breeding. A meeting with a veterinary doctor encouraged him to settle on vaccines as a potentially lucrative side-hustle.
There was a logic to the move. Many vaccines must be grown in animal serum, including horse serum, which is used to make shots for diphtheria, tetanus and scarlet fever.
With shrewd foresight, Cyrus converted a small veterinary laboratory on the site into a spin-off company.
India had only won independence from Britain 18 years earlier. Its government was eager to procure vaccines domestically for its booming population while avoiding the need for costly imports. The next 15 years saw steady growth as SII emerged as a key, low-cost supplier for childhood immunisation programmes.
How the West was won
It was in the Eighties, however, that SII hit the big time, when big investments to expand and upgrade its manufacturing facilities secured a coveted licence to produce vaccines for the World Health Organisation. That paved the way for huge export contracts supplying polio and other vaccines around the world. SII quickly emerged as a global player, aggressively undercutting Western rivals on price, much as other Indian drug manufacturers have done with generic versions of blockbuster medicines like Crestor and Viagra.
It was a trend that prompted many Western pharmaceutical companies to exit vaccine manufacturing as an increasingly unprofitable business. Since then, a steady flow of investment by SII into cutting edge manufacturing and testing facilities, as well as a partnership with the Bill and Melinda Gates Foundation, has ensured further growth.
SII had revenues of 59bn rupees (£614m) in the year ended March 31, 2020. That figure is expected to surge this year on the back of the demand for Covid vaccines.
To meet demand, over the past year SII has ploughed in £270m of its own cash plus £300m from the Gates Foundation to scale up production, hiring 700 staff and importing equipment.
India’s government remains a key client – and SII’s relations with Narendra Modi, the Prime Minister, who visited the plant in Pune last year, are crucial. As well as dealing with the aftermath of a January fire at its factory site, the Poonawallas must juggle the complex demands of India’s leadership with those of investors and other customers.
India, which has recorded the second highest number of Covid-19 infections globally after the US and 153,000 deaths, aims to inoculate 300m of its 1.36bn people by early August.
No Covid profit – for now
The pricing of the Covid vaccines has been a key consideration, although Poonawalla says SII intends to sell at close to the cost of production, at least for the moment.
“I could have charged $10 for a vaccine during the pandemic and taken advantage but it is just my conscience,” he says. “If I priced them at $10-$15, Africans and Indians and developing world countries wouldn’t get access.” A hike further down the line remains possible, however. “Maybe in one to two years I will commercially price them to make up some of the profits.”
The Poonawallas are not exactly strapped for cash. Like his father, Adar – who was educated in Britain and attended the University of Westminster before joining the family business in 2001 and taking over as chief executive in 2011 – also has a taste for the high-life.
In 2015, the family paid $115m for Mumbai’s Lincoln House, an elegant Art Deco beachfront mansion which had formerly served as the US Consulate in India’s financial capital. It was India’s most expensive residential property purchase – but that wasn’t even the family’s main home. Their chief residence in Pune includes frescoes modelled on the Sistine Chapel and a collection of priceless chandeliers acquired from Indian Maharajas.
It may be a while, however, before Poonawalla can sit back and enjoy such comforts. “There is no time to rest for me yet,” he says. “I think for at least another two years. Then I will take a vacation for a couple of months.”