Sanofi, GSK Nearing EU Supply Deal For 300M Covid-19 Vaccine Doses

Sanofi (SNYNF) and and GlaxoSmithKline (GSK) are in advanced discussions with the European Commission (EC) for the supply of up to 300 million doses of a COVID-19 vaccine, the companies have announced.

The vaccine candidate developed by Sanofi and GSK is based on the recombinant protein-based technology used by Sanofi to produce an influenza vaccine, and GSK’s established adjuvant technology.

The use of an adjuvant is of particular importance in a pandemic situation since it may reduce the amount of vaccine protein required per dose, allowing more vaccine doses to be produced- therefore protecting more people.

The doses would be manufactured in European countries including France, Belgium, Germany and Italy.

“Today’s announcement helps to ensure that millions of Europeans will have access to a potential vaccine protecting against COVID-19, once proven safe and effective,” said Thomas Triomphe, Global Head of Sanofi Pasteur. “Together with GSK, we are working relentlessly to develop and produce a vaccine to address this global health crisis.”

Sanofi is leading the clinical development and registration of the COVID-19 vaccine and expects a Phase 1/ 2 study to start in September, followed by a Phase 3 study by the end of 2020. If the data is positive, regulatory approval could be achieved by the first half of 2021. In parallel, Sanofi and GSK are scaling up manufacturing of the antigen and adjuvant to produce up to one billion doses per year overall.

Indeed, Sanofi and GSK have already signed agreements with the United States and with the UK Government, and plan to provide a significant portion of total worldwide available supply capacity in 2021/22 to the global initiative “Access to COVID‐19 Tools (ACT) Accelerator.”

Shares in Sanofi have recovered since reaching a low in March and are now trading about 5.5% higher than at the beginning of the year. This means that the $123.40 average analyst price target reflects 18% upside potential in the shares in the coming 12 months.

Moreover, TipRanks data shows that the majority of analysts have a bullish outlook on the stock. The Strong Buy consensus boasts 11 Buy ratings versus 2 Hold ratings. (See Sanofi stock analysis on TipRanks)

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