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Logistical hurdles are a significant risk for efforts to rapidly
distribute COVID-19 vaccines, but they have resulted in booming
business for companies such as private California-based
Cloudleaf, Germany's SAP SE and others that sell technology for
monitoring shipments from factory freezer to shot in the arm.
Cloudleaf, backed by Intel Capital, the venture arm of chipmaker
Intel Corp, uses sensors attached to material containers to
track the location, temperature, humidity, vibration and
acceleration.
The sensors send data to the cloud, where an artificial
intelligence algorithm can predict if action is needed to
prevent a product from becoming exposed to temperatures outside
the recommended range, known as excursions.
Cloudleaf Chief Executive Mahesh Veerina said orders have jumped
500% this year. To keep pace, the company had to expand its
workforce and increase capital spending by as much as 80%. He
expects a similar growth in capital spending in 2021.
"I have CEOs calling and saying 'Hey, can we get this up in the
next 4-5 weeks'?" Veerina said.
The booming business has also increased the need for fresh
capital. Cloudleaf has raised millions of dollars this year and
has plans to raise "very significant" amounts of capital next
year too, Veerina said.
Pfizer Inc and German partner BioNTech's vaccine must be shipped
and stored at ultra-cold temperatures or on dry ice and can only
last at standard refrigerator temperatures for up to five days.
In contrast, Moderna Inc's vaccine, which is expected to receive
U.S. regulatory authorization as soon as Friday, can be kept in
a regular refrigerator for up to a month.
These varying requirements have increased the risks of
logistical mishaps.
A quarter of all vaccines are degraded by the time they arrive
at their destination due to incorrect shipping procedures,
according to the International Air Transport Association. Losses
associated with temperature excursions in the healthcare
industry are estimated at about $35 billion annually.
Given the scale and the magnitude of the COVID-19 vaccine
rollout, the losses could be significantly higher in 2021,
analysts said.
At least two trays of COVID-19 vaccine doses delivered in
California needed to be replaced after their storage
temperatures dipped below minus 80 Celsius (minus 112
Fahrenheit), U.S. Army General Gustave Perna said on Wednesday.
Blockchain and sensor-enabled cold chain monitoring tools can
help reduce the losses as well as mitigate the risks of theft or
counterfeiting of the vaccines.
Moderna is using SAP's digital solutions to help serialize and
distribute its vaccine. The applications are designed to prevent
counterfeit medicines and enable collaboration with contract
manufacturers and wholesalers.
BOOMING DEMAND
Similarly, Israeli startup Varcode, which makes smart tags that
measure time and temperature, and can track and trace products
throughout the supply chain, has seen a multifold jump in
orders.
Before the pandemic, the orders for Varcode's tags would range
between 100,000 to 1 million units. Since the middle of this
year, Chief Executive Joe Battoe said some of the companies
involved in the vaccine distribution have been asking for
billions of tags. This, in turn, has led to a 200% increase in
Varcode's capital spending this year.
Battoe said the pandemic had "been good for our business."
Varcode's low-cost cloud-based, blockchain-enabled technology
not only sends out alerts when a product goes outside its
prescribed temperature range, but also captures the cumulative
time that the product has been outside of the temperature range.
Its smart tags are serialized and need just a smart phone to
scan them. Every scan leaves a digital trail, reducing the risks
of theft or counterfeiting.
The tags can track individual vials, making them a better fit
for the vaccine distribution in small and rural areas which may
require fewer than the minimum order of doses.
Varcode's tags are produced in Israel. The soaring demand,
however, has prompted Varcode to invest in a unique printer and
an applicator that would generate the tags on site where the
vaccines are being manufactured and apply them to carts going
down the conveyor belt in real time.
Battoe reckons the $5 billion global cold chain monitoring
technology market could grow 50% next year, thanks to the
vaccine rollout.
"I don't think we would be garnering the attention ... had it
not been for the scale and the sensitivity of these vaccines,"
Battoe said.
(Reporting by Rajesh Kumar Singh, Additional reporting by
Douglas Busvine in Berlin; Editing by Joseph White and Grant
McCool)
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