AstraZeneca Gets FDA Nod To Resume US Covid-19 Trial

AstraZeneca announced on Friday that the US Food and Drug Administration (FDA) has authorized the restart of the US late-stage trial of AZD1222, its coronavirus vaccine candidate, which it is developing together with Oxford University.

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AstraZeneca (AZN) said that that the FDA reviewed all safety data from trials and concluded it was safe to resume the trial. AZD1222’s clinical trials have now resumed globally as regulators in the UK, Brazil, South Africa and Japan over the past weeks confirmed that it was safe to do so.

On Sept. 6, all global clinical trials of AstraZeneca/Oxford’s vaccine candidate were halted after an adverse event as a UK participant became seriously ill. The trials were paused to allow the review of safety data by independent committees, and international regulators. The company said the voluntary move was triggered by its standard review process, but did not disclose any further information.

AZD1222 was co-invented by the University of Oxford and its spin-out company, Vaccitech. It uses a replication-deficient chimpanzee viral vector based on a weakened version of a common cold virus (adenovirus) that causes infections in chimpanzees and contains the genetic material of the SARS-CoV-2 virus spike protein. After vaccination, the surface spike protein is produced, priming the immune system to attack the SARS-CoV-2 virus if it later infects the body.

“The restart of clinical trials across the world is great news as it allows us to continue our efforts to develop this vaccine to help defeat this terrible pandemic,” said AstraZeneca CEO Pascal Soriot. “We should be reassured by the care taken by independent regulators to protect the public and ensure the vaccine is safe before it is approved for use.”

The drugmaker added that “it is not unusual that in large scale vaccine trials, some participants will become unwell, and every case has to be evaluated to ensure the careful assessment of safety”.

AstraZeneca expects to receive results from late-stage trials later this year, depending on the infection rate within the populations where the clinical trials are being conducted. Once the results are available, data readouts will be submitted to regulators and published in peer-reviewed scientific journals.

In addition, rolling reviews of the vaccine programme have already begun in some countries where this regulatory pathway is possible, providing regulators access to data as soon as they become available.

AZN shares, which have lost more than 4% over the past month as a result of the clinical trial halt, are still up 4.3% on a year-to-date basis. (See AstraZeneca stock analysis on TipRanks)

SVB Leerink analyst Andrew Berens recently reiterated a Buy rating on the stock with a $65 price target (25% upside potential) suggesting that the adverse event could have a broader impact and could cause near-term volatility in AstraZeneca’s shares as well as in the stock of other companies with COVID vaccine programs until the exact nature of the event is clear.

As a result, Berens cautions that the overall speed of many of the programs could be affected as the investigation progresses and sponsors become more vigilant, as well as public sentiment regarding the safety of the vaccines once approved.

Overall, AZN scores a Strong Buy consensus from the analyst community with 4 unanimous Buy ratings. Looking ahead, the $77.38 average analyst price target puts the upside potential at a promising 49% in the coming 12 months.