AstraZeneca and the global race for a vaccine 

Coronavirus and the race for a vaccine continues to saturate the headlines even with the ongoing discussions surrounding the American election. As cases in Europe continue to surge and lockdowns are being reimposed there is an increasing pressure for pharmaceutical giants like AstraZeneca to fulfill their promises of a vaccine. People are still left wondering when their lives will return to normal.


The progression to an effective, widely available, and reliable COVID-19 vaccine is a challenge. According to the World Health Organisation (WHO), only 9 of 300 COVID-19 experimental vaccines have reached phase three trials before their potential implementation. One of these was AstraZeneca’s AZD1222 COVID-19 vaccine in partnership with Oxford University which was mentioned in the company’s third-quarter results. After the quarter figures, the definitive results from the vaccine trials and its potential availability for the end of this year put the company in a positive light for investors. However, AstraZeneca has fallen short of its agreement to provide 30 million doses to the UK by the end of 2020 and will only be able to provide 4m potential vaccines if approved.


Key variables currently need consideration, such as the effectiveness of the vaccine and therapeutics, supply chain stability, policy guidance and potential scenarios for vaccine rollout. Oxford University and AstraZeneca paused their global phase-3 trials to evaluate the safety incident of a UK patient, who reported experienced an adverse neurological reaction. Trials have now resumed in the UK and India but stay paused in other countries including the US. Trials are expected to continue till the end of 2021 and 2022 for many potential COVID-19 vaccines, according to the WHO.


Interestingly, vaccine development is outside AstraZeneca’s main strategy and infectious diseases are subordinate to its diabetes, autoimmunity, and oncology specialities. The vaccine is an independent product that does not seem to justify their 112 billion GBP market value. The third-quarter results reveal the company is still progressing; AstraZeneca still needs to deliver the 20 per cent annual earnings growth that analysts anticipate in order to mature to its current valuation. As a result, there is persistent talk that AstraZeneca could utilise its highly rated equity to acquire a US equivalent such as Alexion or Gilead Sciences.


The social value of finding an effective vaccine is incalculable which AstraZeneca recognises and has committed to supplying the vaccine at no profit until the pandemic is over, particularly to lower-income countries. Despite this, the Financial Times has stated that the pharmaceutical company has the right to shift to post-pandemic pricing and is prepared to add 20 per cent on top of the cost of the product manufactured to ensure it is not unviable and at a loss in producing the vaccine as the related costs are expected to exceed 1 billion USD.


High-income countries have bought more than half of AstraZeneca’s agreed doses, despite only representing 13 per cent of the world’s population, according to Oxfam. Deutsche Bank’s data demonstrates that the UK has built the largest and most diversified vaccine portfolio with more than 350 million doses, at least 5 per capita, across six leading vaccine contenders. The AstraZeneca vaccine will be accompanied by up to 10 million doses of the Pfizer and BioNTech vaccine this year, as well as many more doses of the Janssen and Novavax vaccines in 2021.


The singular success of one competitor’s vaccine is unlikely – in reality multiple are likely to be mass-produced. Every approved vaccine will be required to meet the demand and strained supply during the pandemic. After this is accomplished, however, it is likely that the effectiveness of the vaccine will be a source of competition for firms, who may find it advantageous to distribute a regular vaccine. This is because both the UK government’s chief scientist and executives at major pharmaceutical companies believe COVID-19 will become an endemic disease.


The pace and scale of vaccine development for COVID-19 is unprecedented and is crucial in ensuring the public can access a safe and effective vaccine in the near future. The viability of AstraZeneca’s vaccine appears promising in the race for normality.


By Josie Grist

Sector Head: Hermione Scott

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