AstraZeneca says on track to deliver on Covid-19 shots as sales hit US$275m

[BENGALURU] AstraZeneca said its Covid-19 vaccine sales were US$275 million in the first-quarter and it is on track to deliver 200 million doses a month from April, as better-than-expected results and a second half growth forecast boosted its shares.

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 three cents on earnings per share, or a drain of about US$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, Mr 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 US$224 million, emerging markets US$43 million and US$8 million in the rest of the world. Sales of US$275 million for the 68 million doses equates to a price tag of around US$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," Mr 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 per cent 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 per cent 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 US$15 billion for its share of sales, with analysts expecting as much as US$18 billion on average.

BioNTech expects close to 10 billion euros (S$16 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 US$18.4 billion from its own vaccine this year.

Before AstraZeneca's earnings, market researcher GlobalData said it expected annual sales of US$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 US 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 US$39 billion purchase of Alexion, which is expected to close in the third quarter.

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

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

REUTERS