AstraZeneca Strikes $127 Million Deal With Brazil For Covid-19 Vaccine

AstraZeneca Plc (AZN) has signed a $127 million deal with Brazil for the production of its potential COVID-19 vaccine.

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Under the terms of the agreement, Brazil will start to locally manufacture AstraZeneca’s experimental vaccine. Elcio Franco, Brazil’s No.2 public health official, said in a press conference that the country will initially produce some 30 million doses of the investigational vaccine, half by December and half by January of next year, Reuters reported.

The vaccine will be manufactured by Brazil’s Fundação Osvaldo Cruz, also known as Fiocruz, the country’s leading public health organization, Franco said.

Brazil is the world’s second most affected country by the coronavirus pandemic, with more than 1.2 million confirmed cases as of Friday and more than 55,000 deaths.

AstraZeneca said this month that it signed supply chain agreements for the capacity to produce 2 billion doses of its potential coronavirus vaccine, also known as AZD1222, which it is developing with Oxford University. The British drugmaker has already inked supply deals with the U.S. and European Union countries.

AZD1222, is among a list of several candidates supported by Operation Warp Speed (OWS), the U.S. government program to accelerate the development, manufacturing, and distribution of COVID-19 vaccines available for Americans by Jan. 2021.

AstraZeneca shares have jumped by almost 40% since mid-March as the company joined the list of companies engaged in the development of a potential coronavirus vaccine. The stock fell less than 1% to close at $52.70 on Friday.

Five-star analyst Steve Scala at Cowen & Co. earlier this month raised the drugmaker’s price target to $60 from $55 and maintained a Buy rating on the shares to reflect its potential to compound annual sales at 10% and 18% through 2025.

Overall AstraZeneca scores a Strong Buy consensus from the analyst community based on 4 unanimous Buy ratings. Despite the recent rally, the $61.67 average price target still puts the upside potential at 17% in the coming 12 months. (See AstraZeneca stock analysis on TipRanks).