AstraZeneca has arranged for enough capacity to supply one billion doses of the vaccine in 2020 and 2021.
Covid-19 vaccine secured a huge funding commitment from the U.S. government, though the earliest doses appear to be committed to the U.K.
The company says the program won’t affect its earnings this year, as it has committed to taking no profit. Still, the stock jumped 3.7% in premarket trading, again demonstrating investor’s buy first, ask question later approach to the Covid-19 vaccine race.
futures were down 0.2%.
AstraZeneca (ticker: AZN) said Thursday the U.S. government’s Biomedical Advanced Research and Development Authority had committed up to $1.2 billion to support the development of the Covid-19 vaccine the company is developing in partnership with the University of Oxford.
AstraZeneca (ticker: AZN) has arranged for enough capacity to supply one billion doses of the vaccine in 2020 and 2021. Data isn’t yet available on the first human trial of the vaccine being conducted.
In a separate statement, the U.S. Department of Health and Human Services said AstraZeneca had agreed to make 300 million doses available to the U.S. by January, with the first doses ready as early as October.
AstraZeneca said it has another arrangement with the U.K. government, under which the company will supply vaccine doses “starting in September,” a month earlier than the U.S. target. It didn’t say how many doses it had committed to the U.K., but did say it had agreements to supply “at least 400 million doses” in total.
AstraZeneca said that if the Phase I/II data are positive, the drug would move on to “late-stage trials in a number of countries,” and that a 30,000 patient Phase III trial is being planned. The vaccine would need authorization or approval from the U.S. Food and Drug Administration before it could be distributed in the U.S.
“AstraZeneca recognizes that the vaccine may not work but is committed to progressing the clinical program with speed and scaling up manufacturing at risk,” the company said in its statement.
The AstraZeneca vaccine, developed in a lab at Oxford University, uses a novel technique that is similar to the one being used by
Johnson & Johnson
(JNJ) in its Covid-19 vaccine. No vaccine based on that approach has ever been approved by the FDA.
The company said the announcement would have no significant impact on its financial guidance for the 2020 fiscal year. Shares of AstraZeneca have rinse 7.9% this year, while the market has fallen 8%. AstraZeneca trades at 25.4 times earnings projected over the next 12 months, according to FactSet, above its 5-year average of 18.4 times projected earnings.
Among the 25 analysts who cover the stock tracked by FactSet, the average rating is Overweight, with a price target of $108.35. The stock closed on Wednesday at $53.78.
In a note Thursday morning, UBS analyst Michael Leuchten said there had been some controversy in recent days over preclinical data published by the Oxford lab. “With capacity in place or at least committed, the vaccine now needs to work,” he wrote.
Leuchten noted that the company hoped to get around some supply bottlenecks by delivering finished vaccines in vials of 10 doses, rather than prefilled syringes.
HHS said in its statement that its arrangement with AstraZeneca was part of Operation Warp Speed, the White House effort to accelerate Covid-19 vaccine development.
Write to Josh Nathan-Kazis at email@example.com