Australia Inks Deal With AstraZeneca For Supply Of Covid-19 Vaccine Candidate

The Australian government announced today that it has signed a letter of intent with UK-based drug company AstraZeneca to secure supply of the company’s AZD1222 COVID-19 vaccine candidate, which it is developing together with Oxford University.

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Under the terms of the deal with AstraZeneca (AZN), the Australian government will offer its citizens the investigational COVID-19 vaccine for free, should trials prove successful, safe and effective.

At the same time, Australia’s Prime Minister Scott Morrison cautioned that the Oxford University vaccine trial was in a phase 3 stage trial but more work was needed to prove its viability.

“The Oxford vaccine is one of the most advanced and promising in world, and under this deal we have secured early access for every Australian,” Morrison said in a statement. “If this vaccine proves successful we will manufacture and supply vaccines straight away under our own steam and make it free for 25 million Australians.”

Morrison added that since there is no guarantee that this, or any other, vaccine will be successful, the government is continuing discussions with other potential suppliers around the world while backing the country’s own researchers to find a vaccine.

Australia also remains committed to ensure early access to the potential vaccine for countries in the Pacific, as well as regional partners in Southeast Asia.

Countries around the world have in recent weeks been lining up to clinch supply deals for the AstraZeneca-Oxford vaccine candidate, including the European Union, Argentina and Mexico.

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

AstraZeneca shares have advanced 13% 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 45% 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)