AstraZeneca says on track to deliver on Covid shots as sales hit $275 mn

Chief Executive Pascal Soriot again defended the vaccine rollout on Friday, saying that Anglo-Swedish drugmaker had not overpromised on its ability to supply shots, as he defended big cuts in deliveries that prompted a European Union lawsuit.

AstraZeneca, which has said it will not make a profit from the shot during the pandemic, was reporting financial details of distribution of the vaccine for the first time – including a hit of 3 cents on earnings per share, or a drain of about $40 million on net income.

The effect on the bottom line “will vary quarter by quarter and we remain committed to supplying this vaccine at no profit during the pandemic period,” a spokesman said.

Speaking in a shareholder call, Soriot said the no-profit pledge would likely end some time next year. He added that afterwards, “certainly for the low, middle income countries we have a commitment to stay at either no profit for some parts of the world or at very modest prices”.

The company said the revenue was based on delivery of about 68 million doses, adding that European sales were $224 million, emerging markets $43 million and $8 million in the rest of the world. Sales of $275 million for the 68 million doses equates to a price tag of around $4 per shot.

When including production and distribution from partners such as the Serum Institute of India, more than 300 million doses have been supplied globally, it added.

AstraZeneca, working with the vaccine’s inventor Oxford University, was one of the leaders in the global race to develop a COVID-19 vaccine. Its cheap and easily transportable shot was hailed as a milestone in the fight against the crisis, but has since faced a series of setbacks.

“Shipments (of COVID-19 vaccines) are increasing as manufacturing improves,” Soriot said during a briefing, adding that it was on track to deliver 200 million doses a month.

“We never overpromised, we communicated what we thought we would achieve at the time,” he said.

AstraZeneca shares were up 5.2% at 7,784 pence at 1507 GMT, putting them on track for their best day since early November. The stock, which hit record highs in July 2020 due to optimism around the vaccine, ended last year 4% lower.

The results come after a bruising start to the year as the drugmaker struggles with production of its vaccine and faces a legal battle after cutting deliveries to Europe, while regulators probe rare blood clots in people who got the shot.

“Despite the intense operational and political challenges created by AZN’s COVID-19 vaccine roll out, the core business continues to perform above market expectations in a most challenging quarter, demonstrating strength across therapeutic areas and geographies,” Citigroup analysts said in a note.

VACCINE RACE
Pfizer, whose COVID-19 vaccine co-developed with German partner BioNTech is several times more costly than AstraZeneca’s, has forecast $15 billion for its share of sales, with analysts expecting as much as $18 billion on average.

BioNTech expects close to 10 billion euros ($12.1 billion) in revenues from committed vaccine deliveries this year but raised the prospect of more supply deals.

Moderna in February said it was expecting sales of $18.4 billion from its own vaccine this year.

Before AstraZeneca’s earnings, market researcher GlobalData said it expected annual sales of $278 million this year and next for the drugmaker’s coronavirus vaccine, branded Vaxzevria.

AstraZeneca said it is working as fast as possible to compile data to apply for U.S. approval. Soriot said there was nothing wrong with the data, but the dataset was very large.

RESILIENT

AstraZeneca’s core business has proved resilient, with the drugmaker sticking to its forecast for 2021 on Friday and predicting better times ahead.

This guidance does not include any impact from sales of the vaccine and its $39 billion purchase of Alexion, which is expected to close in the third quarter.

Total revenue of $7.32 billion for the three months to March exceeded analysts’ expectations of $6.94 billion, while core earnings of $1.63 cents per share beat a consensus of $1.48.

Quarterly sales growth was driven by best-selling lung cancer drug Tagrisso, up 17% to $1.15 billion, while revenues from heart and diabetes drug Farxiga jumped to a better-than-expected $625 million, on new prescriptions for heart failure.