Pressure is mounting on Moderna and Pfizer to share vaccine technology with the developing world after the two biggest proxy advisers lent support to shareholder resolutions.
Institutional Shareholder Services has recommended that investors vote in favour of proposals by Oxfam America that would compel Moderna and Pfizer to commission third-party reports about transferring their vaccine technology.
The drive to expand access to the well-performing mRNA vaccines comes as Moderna unveiled strong trial results for a new “bivalent” vaccine.
Oxfam is lobbying to create a more equal distribution of Covid-19 vaccines, arguing that not sharing the IP and technical know-how creates reputational risks and could slow the end of the pandemic.
ISS said the companies had “fallen short” on transparency, failing to show how managers make decisions about partnering with manufacturers around the world.
In its recommendation, ISS pointed to criticism of Moderna and Pfizer’s “alleged prioritisation of profits” over global public health, and significant support for a waiver of patent protection for Covid-19 vaccines at the World Trade Organization.
But ISS acknowledged that the proposal to commission a report would not force the companies to transfer the technology.
Glass Lewis also recommended investors vote for the proposal at Moderna. But it sided with the board at Pfizer, suggesting a third-party report might not give shareholders more insight than the company’s own disclosures.
Vaccines
Moderna has argued against the Oxfam proposal, saying it already sends 25 per cent of its vaccines to low- and middle-income countries and has promised not to enforce patents during the pandemic. Pfizer recommended shareholders vote against the proposal, saying it has rapidly expanded production and will send one billion doses to developing countries this year.
The increased pressure on Moderna comes as it unveiled the first clinical data on a vaccine that combines the original strain of Sars-Cov-2 with the Beta variant.
The new vaccine elicited more than twice the number of neutralising antibodies against Omicron than the original jab, with Moderna chief executive Stéphane Bancel saying the data validated the “bivalent strategy” that Moderna has been working on since February 2022, showing it could induce higher antibody levels.
But he said the company was pursuing a vaccine that combined the original strain with the Omicron variant as its lead candidate for a booster in the northern hemisphere for the autumn. It expects data on that combination in the second quarter.
Auditors
ISS and Glass Lewis also recommended that shareholders refuse to ratify Moderna’s auditors EY, raising concerns that the Boston-based biotech has spent too much on fees unrelated to the audit, which could cause a potential conflict of interest.
ISS said shareholders should not support the re-election of incumbent board members including Mr Bancel because of concerns over the auditor. Glass Lewis disagreed, noting it was only the first year that Moderna’s non-audit fees were higher than the audit fees.
Moderna, Pfizer and EY did not respond to a request for comment. – Copyright The Financial Times Limited 2022
