The federal government is stepping up production of the AstraZenca vaccine after Australia's biggest biotechnology company CSL (ASX: CSL) abandoned testing of a promising new vaccine it was developing in collaboration with the University of Queensland.
CSL this morning announced that it will not be proceeding with Phase 2 and 3 testing of the vaccine after discovering it gave a false positive diagnosis for HIV.
In response, the federal government says it is increasing the production and purchase of AstraZeneca vaccines from 33.8 million to 53.8 million. It is also increasing supplies of the Novavax vaccine from 40 million to 51 million doses. This is in addition to Australia's access to 10 million Pfizer units and 25.5 million units under the COVAX facility.
CSL is still leading the charge in Australia's war against COVID by manufacturing the AstraZeneca vaccine in its Melbourne facility.
However, the news didn't stop CSL shares falling further during the day. After opening more than 2 per cent lower, CSL shares were down more than 3 per cent in early afternoon trading with almost $200 million in shares changing hands.
CSL says the decision to pull out of the vaccine trials with the University of Queensland (UQ) will not impact the company's FY21 profit guidance.
Prime Minister Scott Morrison says although the Queensland University vaccine is now out of the equation, Australia has strengthened its position with the increased provisioning of the AstraZeneca and Novavax offerings.
"The final outcome from all of that is that there is the potential for slightly earlier completion of the vaccine rollout for Australians in 2021," Morrison says.
"So that net result is a very important outcome for Australians."
The production of the 20 million extra units of AstraZenca in Australia is facilitating the rollout being brought forward, he says.
The now abandoned CSL-UQ vaccine had proved effective in Phase 1 trials, but problems were found in its production of antibodies that were directed towards the "molecular clamp" component of the vaccine.
This caused the false HIV readings in some tests, although follow-up testing showed HIV was not present in those trial participants and that the vaccine itself did not cause HIV.
Dr Brendan Murphy, Secretary of the Department of Health, says the risk that the UQ vaccine would show a false positive test for HIV was known ahead of the trials starting, but that risk was low.
"It was a very, very good technology," he says.
"It was looking like it was going to make antibodies, and it probably would have worked very well as a vaccine. But we can't have any issues with confidence, and we are as a nation now, with a good portfolio of vaccines, able to make these decisions to best protect the Australian people."
Murphy says Australia is in a "good place" with its vaccine strategy.
"We've got that wonderful position in Australia where we can take our time to do the proper regulatory and go through our normal regulatory process," he says.
"We don't need emergency approval; we're in a good position because we've controlled the virus. So I'm very confident now, very confident about the successful vaccination strategy that we'll be facing next year."
Updated at 2.41pm AEDT on 11 December 2020.