Astrazeneca Scores $286.9M US Army Contract For Covid Vaccine

Astrazeneca Pharmaceuticals (AZN) has been awarded a $286.9 milllion firm-fixed-price contract for the delivery of 200 million doses of AZD1222 vaccine for COVID- 19.

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Bids were solicited via the internet with one received, the US Department of Defense revealed.

Work will be performed in West Chester Township, Ohio; and Albuquerque, New Mexico, with an estimated completion date of June 30, 2021.

Fiscal 2021 other procurement (Army) funds in the amount of $286,927,159 were obligated at the time of the award, and the U.S. Army Contracting Command, Newark, New Jersey, is the contracting activity.

Earlier this month, the US Food and Drug Administration (FDA) authorized the restart of the US late-stage trial of AZD1222.

Astrazeneca said 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’s vaccine candidate were halted after an adverse event as a UK participant became seriously ill.

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 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.”

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. (See Astrazeneca stock analysis on TipRanks)

Overall, AZN scores a Strong Buy consensus from the analyst community with 3 unanimous Buy ratings. Looking ahead, the $63 average analyst price target puts the upside potential at 23% for the coming 12 months. That’s with shares up 2% on a year-to-date basis.