AstraZeneca’s Covid troubles could see it pull out of making vaccines
AstraZeneca has suffered a series of setbacks with its Covid-19 jab and may exit the inoculation subsector altogether. Matthew Partridge reports
![African woman getting a Covid jab](https://cdn.mos.cms.futurecdn.net/J29amv4Hs7xem65sTfdNJk-415-80.jpg)
AstraZeneca is “reviewing the future of the Covid-19 vaccines business”, says Farah Ghouri in City AM – and could decide to exit vaccines altogether. Its jab helped boost overall sales by almost a quarter to $15.5bn in the first half of 2021. But AstraZeneca has suffered a “series of setbacks”, including “being sued” by the European Union over jab deliveries.
It’s not surprising that AstraZeneca “is now weighing up whether it wants a future in vaccines at all”, says Hannah Boland in The Daily Telegraph. After all, the vaccine, which was developed in conjunction with Oxford University, has been the victim of European “envy” of “British scientific expertise” and “animosity over Brexit”. For example, in February French president Emmanuel Macron falsely claimed that it was “quasi-ineffective” in older people. At the same time, fears of blood clots meant that it was withdrawn in many countries, even though later evidence suggests that “AstraZeneca-jabbed patients develop blood clots at a similar rate to those who received the Pfizer vaccine”.
Self-inflicted wounds
However, AstraZeneca is also “partly responsible” for its own problems, says Bryan Appleyard in The Times. When it came to delivering vaccines it made promises to the EU that it could not fulfil. What’s more, it “altruistically” decided to set the price of its vaccine at the cost of production. So whatever happened, it was guaranteed to lose money, which is why it is indicating that it may have to start charging a “realistic price”.
Subscribe to MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE
![https://cdn.mos.cms.futurecdn.net/flexiimages/mw70aro6gl1676370748.jpg](https://cdn.mos.cms.futurecdn.net/flexiimages/mw70aro6gl1676370748-320-80.jpg)
Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
No wonder AstraZeneca is discreetly backing away from the “not-for-profit route”, says Julia Kollewe in The Guardian. After all, rivals Moderna and Pfizer, which charge more than double AstraZeneca’s price for their vaccines, have enjoyed great “commercial success”. A few months ago Moderna, which received substantial funding from the US government, forecast that it would make $19.2bn in sales from its vaccine in 2021 alone. It also turned its first profit in the first three months of the year. Pfizer has done even better, raising its forecast for sales this year to $33.5bn.
While AstraZeneca continues to deal with ongoing lawsuits, Pfizer and Moderna are set to continue making “tens of billions of dollars in revenue” for years to come, says the Financial Times. This is because the emergence of the “highly infectious” Delta variant has made countries anxious to secure supplies for “potential booster shots”. With Europe already reserving the right to an additional 1.8 billion doses of Pfizer’s vaccine, some experts predict that by the end of next year, sales of Pfizer’s treatment “will hit $56bn, with Moderna’s reaching $30bn”. AstraZeneca’s trouble with its cost-price treatment means that the dream of “low-priced vaccines for the world lies” now lies in “ruins”, says Appleyard – bad news in Africa, where vaccination rates remain “catastrophically low”.
Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Matthew graduated from the University of Durham in 2004; he then gained an MSc, followed by a PhD at the London School of Economics.
He has previously written for a wide range of publications, including the Guardian and the Economist, and also helped to run a newsletter on terrorism. He has spent time at Lehman Brothers, Citigroup and the consultancy Lombard Street Research.
Matthew is the author of Superinvestors: Lessons from the greatest investors in history, published by Harriman House, which has been translated into several languages. His second book, Investing Explained: The Accessible Guide to Building an Investment Portfolio, is published by Kogan Page.
As senior writer, he writes the shares and politics & economics pages, as well as weekly Blowing It and Great Frauds in History columns He also writes a fortnightly reviews page and trading tips, as well as regular cover stories and multi-page investment focus features.
Follow Matthew on Twitter: @DrMatthewPartri
-
CrowdStrike IT outage: a global meltdown
Millions were affected by the CrowdStrike IT outage recently, which grounded flights and took the news off the air. Was this just a hiccup or a warning of much worse to come?
By Simon Wilson Published
-
Revolut finally bags a UK banking licence – what's next for the fintech?
Revolut has finally been granted a UK banking licence following three years of negotiations with the regulator
By Kalpana Fitzpatrick Published
-
UK mid-caps: an improving outlook
UK mid-caps have perked up and the rally may run further, but long-term investors should remain selective
By Cris Sholto Heaton Published
-
The tobacco industry is going smoke-free - how to profit from it
Tobacco companies have realised their traditional products are on the wane. But new opportunities have opened up – and should prove lucrative
By Rupert Hargreaves Published
-
Is it time to invest in creative industries?
Any industrial strategy should not overlook the creative industries, one of our top national assets
By David C. Stevenson Published
-
Is Mercia Asset Management set for success?
Mercia Asset Management helps the government fund smaller companies in Britain’s regions. Should you invest?
By Rupert Hargreaves Published
-
British stocks set for a boost
British stocks are due for a bounce as the UK looks more stable compared to many economies
By Alex Rankine Published
-
Ocado shares jump by a fifth
Ocado takes a turn for the better after attractive profit forecasts were announced
By Dr Matthew Partridge Published
-
The AI boom is on borrowed time
The hype around the AI boom could be on its way out – but why?
By Alex Rankine Published
-
Diploma: a blue-chip set for strong growth
Diploma, whose niche products include seals and fasteners, serves an array of growth markets. Should you invest?
By Dr Mike Tubbs Published