Oxford Biomedica announced on Monday that it has signed an 18-month supply agreement with AstraZeneca for large-scale commercial manufacturing of the adenovirus vector-based COVID-19 vaccine candidate, AZD1222.
Oxford Biomedica shares rose 2.6% to $11.50 in morning US trading. Under the terms of the agreement, which is part of a three-year master supply and development agreement, AstraZeneca (AZN) will make an upfront payment of £15 million ($20 million) to Oxford Biomedica as a capacity reservation fee.
Subject to satisfactory scale up of manufacturing capacity and continuation of the vaccine programme, Oxford Biomedica (OXBDF) expects to receive additional revenue in excess of £35 million plus certain materials costs for the manufacturing of multiple large-scale batches of AZD1222 until the end of 2021. In addition, the two partners have an option to extend the supply period for AZD1222 by a another 18 months into 2022 and 2023 by mutual agreement.
As part of this agreement, the gene and cell therapy company will reserve capacity for AstraZeneca in up to three manufacturing suites in the group’s new 7,800 m2 commercial manufacturing centre, Oxbox, for an initial 18-month period. This new GMP facility is suitable for manufacturing viral vectored vaccines and gene therapy vectors of up to 1,000 litre scale, the company said.
As part of Oxford Biomedica’s previously announced partnership with the UK’s Vaccine Manufacturing Innovation Centre (VMIC) two new manufacturing suites within Oxbox will become operational in the next two months, significantly earlier than originally planned.
“We have been working hard with AstraZeneca and other partners to establish GMP manufacturing of AZD1222 at scale, and we are therefore very pleased to extend our current partnership to include large-scale manufacturing of the vaccine candidate, AZD1222,” Oxford Biomedica CEO John Dawson said. “Our previously announced partnership with the UK’s Vaccine Manufacturing Innovation Centre (VMIC) has supported our ability to make additional facilities available for this supply agreement. We look forward to continuing to work with AstraZeneca to rapidly contribute to the global effort to support the large-scale manufacturing of AZD1222 to ensure that the vaccine candidate is available if and when it is approved by Regulatory Authorities.”
This agreement builds on the supply agreement between the companies announced in May, which related exclusively to the manufacturing of AZD1222 at 200L scale.
Separately, AstraZeneca announced today that it has started enrolling adults for a Phase 3 clinical trial in the US of its AZD1222. The trial, which will include 30,000 participants over the age of 18, will assess the safety, efficacy and immunogenicity of the potential vaccine.
Shares in Oxford Biomedica have recovered from dropping to a low in March and are now trading 30% higher than at the start of the year. What’s more, the $16.24 average analyst price target implies another 45% upside potential over the coming year.
Five-star analyst Joseph Pantginis at H.C Wainwright & Co recently reiterated a Buy rating on the stock with a $19.39 price target, saying that “Oxford Biomedica emerges in a strong position to support both initial and, if successful, future efforts for the development and large scale production of a vaccine against COVID-19”.
In line with Pantginis, the rest of the Street has a bullish outlook on the stock bringing together 4 unanimous Buy ratings, which add up to a Strong Buy analyst consensus. (See Oxford Biomedica stock analysis on TipRanks)
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