AstraZeneca’s Covid vaccine will become profitable after the pharmaceutical firm signed its first for-profit deals for the drug, moving it away from the non-profit model it adopted during the pandemic.
The British-Swedish firm, which posted $1.05 billion sales for the vaccine for the three-month period to the end of September, said the drug will remain non-profit for developing countries.
The vaccine helped the company’s total sales jump 50 per cent to $9.9 billion for the three months to September, while revenue for the year to date, excluding the vaccine, increased 32 per cent to $25.4bn.
While the vaccine contributed just $0.01 per share to earnings in the third quarter, the drug will now transition to “modest profitability” as new orders are received.
The drugmaker said the limited profit from the vaccine in the next quarter will offset costs related to the vaccine, which was developed in partnership with Oxford University to prevent serious illness from contracting Covid-19.
Pascal Soriot, chief executive of AstraZeneca, said the company’s scientific leadership continues to provide strong revenue growth and exceptional pipeline delivery.
“Our broad portfolio of medicines and diversified geographic exposure provides a robust platform for long-term sustainable growth,” Mr Soriot said.
“Following accelerated investment in upcoming launches after positive data flow, we expect a solid finish to the year and our earnings guidance is unchanged.”
AstraZeneca committed to selling the vaccine “at cost” during the pandemic when the drug was first released, as part of its agreement with Oxford University, which designed the drug.
Delays in deliveries as well as concerns over a rare blood clotting side effect hampered the company's ability to dominate the vaccine market, with many countries turning to rival vaccines that use mRNA technology, despite AstraZeneca's vaccine being cheaper and easier to transport.
Adam Vettese, analyst at multi-asset investment platform eToro, said AstraZeneca's robust earnings "won’t set shareholders alight as it looks to move forward from the pandemic".
"The challenge for AZ now is where next. It has produced a successful (if at times controversial) vaccine and its forward earnings guidance has remained unchanged, " Mr Vettese said.
"The Covid vaccine itself is providing the firm a small profit, despite the firm previously committing to making the jab a charitable endeavour. While the Covid pandemic is very much still front and centre the firm needs to make sure it continues to progress R&D in other areas to keep pace with its competitors in the future."
On Friday, the company unveiled plans to set up a separate arm for vaccines and antibody treatments that focus on Covid-19.
The pharmaceutical company maintained its earnings guidance for the year as it hailed "strong revenue growth and exceptional pipeline delivery".
The company expects core earnings per share of between $5.05 and $5.40, with total revenue expected to grow by a mid-to-high twenties percentage including the Covid-19 vaccine.
AstraZeneca reported that product sales have risen by a third, with the trend set to continue as it announced eight positive phase three trials, including treatments for liver and prostate cancer.
More than 50 per cent of the world's population has received at least one shot of a Covid-19 vaccine so far, with more than 7.25 billion vaccine doses administered across the globe.