AstraZeneca debates future of vaccines business

Covid vaccine sales triple in second quarter but application to US for approval put off to second half of this year

AstraZeneca chief executive Pascal Soriot said he had no regrets over getting involved in Covid-19 vaccines as the company has made an “enormous difference”. Photograph: iStock

AstraZeneca chief executive Pascal Soriot said he had no regrets over getting involved in Covid-19 vaccines as the company has made an “enormous difference”. Photograph: iStock

 

AstraZeneca is exploring options for the future of its Covid-19 vaccine and expects greater clarity on the matter by the end of 2021, a senior executive said on Thursday.

The review of the future of the vaccine comes after a series of setbacks in its race to produce a shot for the world. Executives emphasised it was too early to say what the decision on the vaccine’s future would be.

It comes as sales of AstraZeneca’s Covid-19 vaccine more than tripled to $894 million (€752m) in the second quarter from the previous three months.

The drugmaker also updated its 2021 forecasts on Thursday to include sales from its Alexion unit.

The Anglo-Swedish company said it has delayed its application to US authorities for approval of the vaccine to the second half of this year. Previously AstraZeneca was hoping to file it within the first half.

AstraZeneca agreed to work with the University of Oxford on its Covid-19 shot last year despite having no prior vaccine experience, taking on the project with a pledge not to make a profit during the coronavirus pandemic.

“A small group of people reporting into Mene [Pangalos, research chief] and myself are thinking about: is this a sustainable business?” AstraZeneca executive vice-president and president of the biopharmaceuticals business unit Ruud Dobber said, referring to the vaccines business.

“We need to have that discussion with our senior executive team, and then with the board of AstraZeneca. We are exploring different options, but it is far too early at this stage to conclude that [process].”

Mr Dobber added that “before year-end, we will have more clarity”.

“Hopefully before the year ends, we will have a better view how to move forward in the next few years. 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.”

The vaccine, invented by Oxford University and hailed a milestone in the fight against the pandemic, has faced several setbacks, including production delays and possible links to some rare , but severe side effects that are being probed by regulators.

While a $39 billion deal to buy rare drug firm Alexion is much more integral to the company’s business strategy, the Covid-19 vaccine has quickly become the public face of the company’s efforts during the coronavirus pandemic.

Financial guidance

The company updated its financial guidance. It now expects total revenue to increase by a low-20s percentage this year, and core earnings of $5.05 per share to $5.40 per share.

The forecast does not includes sales from the vaccine.

Total revenue rose 25 per cent to $8.22 billion for the three months to June on a constant-currency basis, while core earnings came in at 90 US cent per share, compared with analysts’ consensus forecasts of 92 cent on sales of $7.58 billion.

Chief executive Pascal Soriot said he had no regrets over getting involved in Covid-19 vaccines as the company has made an “enormous difference”. – Reuters