AstraZeneca Strikes First China Manufacturing Deal For Covid-19 Candidate

AstraZeneca has entered into an agreement with Shenzhen Kangtai Biological Products to manufacture and supply its coronavirus vaccine candidate, AZD1222, in mainland China.

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Under the terms of the exclusive cooperation agreement, Shengzhen Kangtai Bio commits to ensure annual production capacity of at least 100 million doses of AstraZeneca (AZN) potential vaccine AZD1222 by the end of this year. To meet the needs of the Chinese market, the Chinese vaccine maker needs to boost capacity to at least 200 million doses by the end of 2021, according to the agreement.

The two partners said that they will explore the possibility of cooperation in other regions and markets.

AstraZeneca, which is developing AZD1222 together with Oxford University, has in recent weeks signed supply chain agreements for the capacity to produce 2 billion doses of its vaccine candidate. The British drugmaker has inked supply deals with the U.S. and European Union countries. Late-stage Phase II/III trials are currently underway in the UK, Brazil and South Africa and are due to start in the US, AstraZeneca said.

AZD1222 is one of several vaccine 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 advanced 11% this year as the drugmaker joined the list of companies engaged in the development of a potential coronavirus vaccine. Looking ahead, the $81.84 average analyst price target puts the upside potential at a promising 48% in the coming 12 months.

Overall, the stock scores a Strong Buy consensus from the analyst community based on 3 unanimous Buy ratings. (See AstraZeneca stock analysis on TipRanks)