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CHICAGO, Dec. 17 (Reuters) – More than half of the world’s vaccines are wasted each year due to issues with temperature control, logistics and shipping.
Logistical hurdles pose a significant risk to efforts to rapidly distribute COVID-19 vaccines, but they have resulted in flourishing business for companies such as Cloudleaf, a private company based in California, SAP SE in Germany and others. who sell technology to monitor shipments from the factory freezer to the injection arm.
Cloudleaf, backed by Intel Capital, the venture capital arm of chipmaker Intel Corp, uses sensors attached to material containers to track location, temperature, humidity, vibration, and acceleration.
The sensors send data to the cloud, where an artificial intelligence algorithm can predict whether action is needed to prevent a product from being exposed to temperatures outside the recommended range, called excursions.
Cloudleaf chief executive Mahesh Veerina said orders have jumped 500% this year. To keep pace, the company had to increase its workforce and increase its capital spending by up to 80%. He expects similar growth in capital spending in 2021.
“CEOs call me up and say, ‘Hey, can we fix this in the next 4-5 weeks?’ Said Veerina.
The booming business has also increased the need for new capital. Cloudleaf has raised millions of dollars this year and plans to raise “very significant” capital next year as well, Veerina said.
The vaccine from Pfizer Inc and its German partner BioNTech should be shipped and stored at ultra-cold temperatures or on dry ice and can only last up to five days at standard refrigerator temperatures.
In contrast, Moderna Inc’s vaccine, which is expected to receive U.S. regulatory clearance as of Friday, can be stored in a regular refrigerator for up to a month.
These varying requirements have increased the risk of logistics accidents.
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. The losses associated with temperature variations in the healthcare industry are estimated to be around $ 35 billion per year.
Given the scale and scale of the COVID-19 vaccine rollout, losses could be significantly higher in 2021, analysts said.
At least two COVID-19 vaccine dose trays shipped to California had to be replaced after their storage temperatures fell below minus 80 Celsius (minus 112 Fahrenheit), US Army General Gustave Perna said on Wednesday. .
Blockchain and sensor-activated cold chain monitoring tools can help reduce wastage as well as mitigate the risk of vaccine theft or counterfeit.
Moderna uses digital solutions from SAP to serialize and distribute its vaccine. The apps are designed to prevent drug counterfeiting and enable collaboration with manufacturers and contract wholesalers.
CHANGING DEMAND
Likewise, Israeli start-up Varcode, which makes smart beacons that measure time and temperature, and can track and trace products throughout the supply chain, has seen a multiple jump in orders.
Before the pandemic, orders for Varcode tags ranged from 100,000 to 1 million units. As of the middle of this year, managing director Joe Battoe has said some of the companies involved in vaccine distribution are asking for billions of labels. This, in turn, 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 alerts when a product goes out of its prescribed temperature range, but also captures the cumulative time the product has been out of range. temperature.
Its smart tags are serialized and only need a smartphone to scan them. Each scan leaves a digital trace, reducing the risk of theft or counterfeiting.
Labels can follow individual vials, making them better suited for vaccine distribution in small rural areas that may require less than the minimum dose order.
Varcode’s labels are produced in Israel. Growing demand, however, prompted Varcode to invest in a single printer and applicator that would generate the labels at the site where the vaccines are made and apply them to the carts moving down the conveyor belt in real time.
Battoe estimates that the global $ 5 billion cold chain monitoring technology market could grow by 50% next year, thanks to the deployment of the vaccine.
“I don’t think we would get attention… without the scale and sensitivity of these vaccines,” Battoe said.
Reporting by Rajesh Kumar Singh, Additional reporting by Douglas Busvine in Berlin; Edited by Joseph White and Grant McCool
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