MRK Merck and Co Inc

By Marc Vartabedian 

A handful of drone-delivery startups want to help transport Covid-19 vaccines from distribution facilities to health centers, vying for a logistical role in what is likely to be a sprawling and complex undertaking.

Several of these businesses recently have entered into medical delivery partnerships with drug companies and retailers -- including Merck & Co. and Walmart Inc. -- that could help position them to take part in the high-profile effort to distribute Covid-19 vaccines.

Meanwhile, some startups have discussed with governments around the world their ability to use unmanned aerial drones to transport vaccine doses, mainly in remote areas.

The efforts are indicative of drone companies' ambitions to reshape shipping and logistics. Delivering Covid-19 vaccines would enable drone startups to demonstrate to investors and potential customers on a world stage their ability to streamline operations and cut costs across distribution networks.

Venture-capital investors have poured $405 million into drone startups through the first nine months of this year, which is roughly on par with recent years, according to Teal Group Corp., an aerospace and defense analytics firm.

To be sure, using drones to transport Covid-19 vaccines likely would represent a sliver of the overall effort. They would primarily be for hard-to-access regions and fly along fixed routes to move doses in bulk. Tight security measures under consideration by governments and companies meant to guard against theft and highly specific storage temperature requirements would have to be factored in. In some cases, distributing Covid-19 vaccines would be an extension of existing aerial medical deliveries these companies already are performing.

Drone fleets can reduce reliance on drivers, increase delivery capacity and speed up the time it takes for supplies to reach patients, said Hannan Parvizian, co-founder and chief executive of drone company Volansi Inc. These advantages would be valuable in complex and urgent Covid-19 vaccine distribution, Mr. Parvizian said.

"We think truly that this technology is going to be a key element of the Covid vaccine distribution," Mr. Parvizian said. Fleets of dozens of drones, for instance, could make half-hour trips delivering thousands of vials each day to health centers in remote areas.

Pharmaceutical giant Merck partnered with Volansi in September to fly medicines and vaccines from a Merck manufacturing facility in North Carolina to a nearby health clinic in unmanned autonomous drones. North Carolina hospital system Vidant Health is participating in the program, which is using an electric Volansi drone capable of carrying roughly 5 pounds of medical cargo to locations up to 50 miles away.

The partnership with Volansi is separate from Merck's Covid-19 vaccine development efforts and is designed to demonstrate drones' ability to transport medicines and vaccines and explore ways to expand Merck's supply-chain capabilities, a Merck spokeswoman said.

Volansi has also engaged in discussions with the U.S. military about how its technology can help distribute a Covid-19 vaccine, Mr. Parvizian said.

Volansi already offers an aerial transport service for machine parts and other cargo to industrial companies and the U.S. military. It has developed temperature-control technology that would likely be needed to transport Covid-19 vaccines, Mr. Parvizian added. Some vaccines in development could require storage at temperatures as cold as minus 80 degrees Celsius, or minus 112 degrees Fahrenheit.

Merck and San Francisco-based Volansi have collaborated since 2018 on the use of drones to deliver medicines and vaccines during crises. Merck, a longtime vaccine maker, recently began testing one of its experimental Covid-19 vaccine candidates in healthy volunteers in Belgium.

Volansi raised $50 million from investors including Lightspeed Venture Partners in September.

Australian drone company, Swoop Aero, also is preparing for a Covid-19 vaccine breakthrough. The startup's Chief Executive Eric Peck discussed with the Democratic Republic of the Congo's head of public health in October about delivering a Covid-19 vaccine via drone once one becomes available, according to Sabrina Ravail, the head of commercial at Swoop Aero. The startup is developing a drone delivery network in the country that could be used to distribute Covid-19 vaccines.

The startup has had similar discussions with officials in Australia and New Zealand, Ms. Ravail said.

Swoop Aero, which operates fleets of electric fixed-wing drones that take off and land vertically, has delivered vaccines, such as for Ebola, as well as other medical supplies, in Africa since 2018. Some of the company's aircraft can fly up to 90 miles on a single charge and carry more than 500 doses of vaccines.

Although the Federal Aviation Administration, the U.S. sector's regulating body, has taken recent steps to expand commercial drone opportunities, existing rules would restrict widespread adoption in population centers. For instance, restrictions on drone flight outside operators' visual lines of sight would inhibit large-scale rollout efforts in the U.S., Mr. Parvizian said.

Despite the challenges, pilot testing is ramping up in the U.S. This fall, drone services provider DroneUp LLC began a partnership with Walmart and Quest Diagnostics Inc. DroneUp's aircraft are delivering Covid-19 test kits to single-family homes in North Las Vegas and a Buffalo, N.Y. suburb within a one mile radius of designated stores there. The Virginia-based startup generates revenue from services such as inspecting telecommunications towers but is pushing into delivery, DroneUp founder and CEO Tom Walker said.

"If Covid vaccines were something we could feasibly deliver, we'd be all over it," Mr. Walker said. "It's certainly something we're discussing."

A Walmart spokeswoman said the pilot project with DroneUp will help the company learn about the role drone deliveries can play in pandemic response, health-care delivery and retail.

Write to Marc Vartabedian at marc.vartabedian@wsj.com

(END) Dow Jones Newswires

November 01, 2020 09:14 ET (14:14 GMT)

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