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AstraZeneca questioning future Covid-19 vaccine involvement

"Is the vaccine business a sustainable business for AstraZeneca for the next five or 10 years/"

AstraZeneca PLC - AstraZeneca questioning future Covid-19 vaccine involvement
Covid-19 vaccine has been supplied on a not-for-profit basis

AstraZeneca PLC (LSE:AZN) has started to question its long-term role in Covid-19 vaccines and will make a decision on its involvement by the end of the year, according to a senior executive.

The pharma has been one of the Covid-19 heroes, working in partnership with Oxford University to help develop and distribute a vaccine for the virus in record time even though it had little experience beforehand.

Almost 90% of vaccines supplied by the Covax global access initiative around the world have come from Astra, which has provided one billion doses to 170 countries.

The vaccine has been supplied on a not-for-profit basis, however, and Ruud Dobber, President of Biopharmaceuticals Business Unit, told Reuters that it was questioning whether this was sustainable and that it was “exploring different options” for the business.

“Before year-end, we will have more clarity... if you ask me, is the vaccine business a sustainable business for AstraZeneca for the next five or 10 years, that big strategic question is under discussion.

“A small group of people reporting into Mene (Pangalos, research chief) and myself are thinking about (whether this is) a sustainable business."

"We need to have that discussion with our senior executive team, and then with the board of AstraZeneca," the newswire reported.

AstraZeneca would meet its commitments for doses under current contracts, Dobber said.

AstraZeneca eyes big jump in revenue after Alexion acquisition

Though AstraZeneca has won plaudits for its role in developing a Covid-19 vaccine, it has not come without cost.

The company ended up in court after the European Union accused it of reneging on a supply deal, while the vaccine is no longer given to younger people in the UK and elsehwere after reports it can cause blood clots.

In the half-year ended 30 June, Astra's revenue climbed 31% to US$8.2bn, with core EPS up 26% to US$2.53 per share.

New medicines were up 31%, oncology advanced 19% while respiratory and immunology increased by 11%.

The COVID-19 vaccine generated US$894mln of sales, twice the consensus view of US$422mln.

Pfizer (NYSE:PFE) raises revenues forecast by 30%

AstraZeneca's results came as another vaccine maker, Pfizer (NYSE:PFE), raised estimates for revenues from its version by 30% from just a few months ago.

Pfizer (NYSE:PFE) Inc now expects sales for its Covid-19 vaccine this year to reach about $33.5 bn, which will give a huge boost to earnings as the US pharma giant is charging upwards of ten times more for its vaccine than AZN.

The US pharma has also applied for regulatory approval in the US for a third or booster shot as research has shown that that the vaccine losses 50% effectiveness after about 18 months.

A clinical trial testing an updated version of its vaccine that targets the Delta variant is also set to start next month, Pfizer (NYSE:PFE) said.

Shares in AstraZeneca rose 0.6% to 8,316p.

Quick facts: AstraZeneca PLC

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