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Impact investing: Case study - vaccines

Impact investing: Case study - vaccines

RI annual review

Balancing the double objective of creating positive social impact and financial returns requires the ability to seek out innovative projects. A combination of innovation and investment can help generate more effective impact results.

Here we demonstrate how we go about setting and measuring the positive social and financial outcomes of a project within one of our impact strategies.

Social impact requirements

Starting with the overall theme of health and well-being, our investment strategy centres around UN Sustainable Development Goal 3 – ensure healthy lives and promote well-being for all ages. Underlying this goal is a range of issues, which includes; financial risk protection, access to quality essential healthcare services and access to safe, effective, and affordable essential medicines and vaccines.

As part of the investment framework, we identified the key impact objective:

  • To tackle global health challenges in developing countries

To meet this objective, we identified two specific impact targets, which were:

  • To improve the lives of approximately 10 million people annually by 2025 through the provision of early diagnosis, vaccines, and drugs at accessible price points
  • To save the lives of approximately 100,000 people annually by 2025

Financial requirements

The strategy’s financial returns are generated by providing equity, debt, and project financing to late stage clinical programmes. Financing is provided to a range of organisations including product development partnerships, contract research organisations, and pharmaceutical companies and must be deployed towards developing products that primarily target neglected diseases or maternal and infant health issues.            

The strategy can generate financial returns  through equity appreciation and liquidation, by receiving interest on loans, and through royalty payments. The strategy also pursues 'defined exits' through  incentive programs like the US Food and Drug Administration’s (FDA) Priority Review Voucher Program.

The FDA’s Priority Review Voucher (PRV) Program was set up to motivate more treatments for neglected and rare diseases and also speed the approval of potential blockbuster therapies. A developer of a treatment for a neglected or orphan disease receives a voucher for priority review from the FDA to be used with a product of its choice or sold to another developer.

Laying out the framework

The strategy has targeted a range of neglected diseases including cholera, river blindness, hepatitis C,  malaria, dengue, HIV, soil-transmitted helminth infections as well as maternal health.

For each of these diseases, the investment framework defines impact objectives, targets and outcomes to identify the specific desired results.

A notable early success from this investment has been the development and distribution of a cholera vaccine, Euvichol, which was financed through this vehicle. The vaccine has been used to treat cholera outbreaks in Haiti in December 2016 and Somalia in March 2017, as well as disaster-affected areas in Sierra Leone in September 2017. With approximately 6.6 million doses delivered to date, the vaccine has achieved significant positive outcomes as a result.

The framework for cholera is as follows:

  Impact thesis Impact metric Description Annual target by 2025 Estimated Results to date WHO/Public health
Cholera Increase supply of cholera vaccines Lives improved Cases of cholera prevented 694,858 100,000 Submitted for WHO prequalification. Used by public health authorities to treat outbreaks in Haiti and Somalia.
Lives saved Deaths from cholera averted 8,130 1,200

Concrete, quantifiable results

The results above show concrete, quantifiable evidence of the kind of positive social outcomes that can be achieved through impact investing. The increased supply of Euvichol has prevented an estimated 100,000 cases of cholera to date and saved an estimated 1,200 people from dying of the disease.

This drug is still in the relatively early stages of distribution, so we expect these figures to increase with corresponding positive health outcomes.

The products financed by the vehicle, including Euvichol, are monitored against global health statistics provided by organisations like the World Health Organisation to assess how vaccines like Euvichol are helping to solve global health challenges.

In Somalia, lack of rain caused severe drought, displacing hundreds of thousands of people. Although the rainy season brought some relief, the flooding it caused likely increased the number of cholera cases.

Application to the UN SDGs

The strategy shows that investments linked to the UN SDGs can tackle challenges such as ending communicable disease epidemics while maintaining financial integrity.

The UN’s SDGs were established to positively transform the world through sustainable development. To achieve this, new financing models that steer funds towards activities and initiatives that promote sustainability and address neglected areas are necessary.

Targeted impact investments can answer this call. In this example, financing an enterprise that has developed an essential vaccine has clearly made a positive impact on the health and well-being of people in Somalia and Haiti. These results have been achieved in conjunction with robust oversight - which included monitoring product quality, safety, and business ethics - helping to ensure financial results are delivered in a responsible way.

Haiti faced a fresh outbreak of cholera in 2016 after Hurricane Matthew hit the area, flooding rivers and fouling wells, forcing people to drink contaminated storm water. It is the second outbreak of the water-borne disease to affect the island; it recorded its first outbreak after the 2010 earthquake.