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
Vaccination rates in Africa remain catastrophically low
(Image credit: © BRIAN ONGORO/AFP via Getty Images)

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 At the same time, fears of blood clots meant that it was withdrawn in many countries, even though later evidence suggests that “AstraZeneca-jabbed patients develop blood clots at a similar rate to those who received the Pfizer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”.

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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”.

Dr Matthew Partridge

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