COVID-19 Update: Johnson & Johnson suspended amid blood clot concerns - bigger problem for the EU than for the US

Overall - current thinking

The picture is still very mixed in EU with some countries worsening again after a decline in cases last week (France and Germany). It adds to the suspicion that the drop was related to less testing over Easter. The situation is still critical in Eastern Europe, India, Brazil and Turkey. In the Nordic countries, Norway and Finland have seen more improvement. In the US, cases on a national level have increased slightly amid an easing of restrictions but there are large differences across states. With most risk groups vaccinated soon, the US should be able to open up more.  

We continue to see April as the turning point in the crisis in the Northern Hemisphere when it comes to infections and deaths. Besides warmer weather, we now vaccinate elderly and risk groups, which should put a limit on how high hospitalisations will go. The countries that now tighten measures again should see improvement kick in during April - as was the case last year. However, for the EU we see a risk that the turning point is delayed into May, as vaccinations are much slower than in UK and the US.

Israel has more or less completed the vaccination process and has reopened significantly. In the UK, nearly 48% have received at least the first dose while the share in the US is above 37%. The EU is still lagging behind at 16.6%. Vaccinations in the US will not be derailed by the Johnson & Johnson pause amid investigations of very rare blood clot events similar to what have been the case after AstraZeneca. It is more problematic from an EU perspective, where countries are already dealing with lower confidence in AstraZeneca. If the EU cannot rely on Johnson & Johnson either, it will be much more difficult to reach the target of 70% of the adult population being vaccinated by the end of summer.

For now, however, we stick to our base case that restrictions are eased gradually in spring and that they are not re-imposed in the autumn. We are monitoring the Johnson & Johnson situation closely. 

Analysis so far have found that vaccines are effective also against new variants, especially with respect to severe cases, which in our view is the most important feature of vaccines. In addition, most vaccine producers have started to update vaccines targeting new variants, just in case, and Moderna have published very good results showing that its candidates are working. This means that the probability is low that the vaccines turn out to be ineffective and we will experience another "lost year" from an economic perspective is low. The biggest problem is that we would like to increase production capacity at a faster pace.

We cannot rule out this becomes an "endemic", i.e. we need to revaccinate in particular risk groups and health care workers every year to provide protection. That scenario, however, is not as bad as ineffective vaccines and should be manageable.