Home >Companies >Company Results >AstraZeneca loses money on covid-19 vaccine for second straight quarter

AstraZeneca PLC narrowed losses from its Covid-19 vaccine in the second quarter but its earnings fell below forecast, highlighting the divide between it and rivals, such as Pfizer Inc., that are profiting from their shots.

The British-Swedish drugmaker pledged last year to distribute the shot at no profit during the pandemic. AstraZeneca Chief Executive Pascal Soriot said Thursday the company and its manufacturing partners had released a billion doses of the vaccine for use in more than 170 countries. That included 700 million doses delivered by the end of June.

The vaccine boosted second-quarter revenue by $894 million, but contributed to about $13 million in losses in the quarter, shaving 1 cent off the company’s per-share earnings. AstraZeneca lost around $40 million on its Covid-19 vaccine in the first three months of this year.

Shares were roughly flat in London midday.

The results widen a financial divide between AstraZeneca and other Covid-19 vaccine makers that fast-tracked pandemic shots. U.S. drug giant Pfizer Inc. said Wednesday it had delivered more than one billion doses of its vaccine, developed with Germany’s BioNTech SE. In contrast with AstraZeneca’s, that shot has been hugely profitable.

Pfizer said it expects sales of its Covid-19 vaccine this year to amount to $33.5 billion, almost 30% higher than its forecast three months earlier, reflecting the company’s expectations for demand for booster shots. The company has forecast pretax profit on the vaccine as a percentage of sales in the range of the high 20s. Pfizer hasn’t broken out vaccine profits, but the guidance suggests it is on track to make more than $8 billion in profit from the shot this year.

AstraZeneca says it expects eventually to break even on the vaccine, which it developed with the University of Oxford, but that it could continue to have a fluctuating effect on profit margins. After filling existing orders at cost, executives said the company could impose staggered prices based on income levels in different countries. “We will move to an affordable price. We can’t be at no profit forever," Dr. Soriot told reporters Thursday.

AstraZeneca’s vaccine isn’t authorized for use in the U.S., and the company’s plans to seek U.S. regulatory approval have been long delayed. Executives said Wednesday they plan to apply to the Food and Drug Administration for full approval of the vaccine by year-end. The U.S. has an oversupply of other vaccines, but Dr. Soriot said AstraZeneca’s could still play a role there, so he wants U.S. approval.

AstraZeneca’s overall second-quarter revenue was $8.2 billion, a 30% increase that beat analysts’ expectations. Excluding the vaccine, revenue was up 14% at $7.3 billion. A second-quarter net profit of $550 million fell short of analysts’ estimates, hurt by vaccine costs more than anything else, as well as increased profit-sharing commitments tied to certain drugs. Profit was $738 million in the year-earlier period. A key benchmark, product sales, increased 31% from the year-earlier period to $8.2 billion, boosted by sales of core cancer drugs and treatments for asthma.

AstraZeneca raised its 2021 guidance for core earnings growth in 2021 after its recent $39 billion acquisition of Boston-based Alexion Pharmaceuticals Inc. AstraZeneca expects Alexion to bolster its global footprint in rare diseases, furthering a replenishment of AstraZeneca’s drug pipeline under Dr. Soriot.

The Cambridge, England-based company has struggled to manage an ambitious Covid-19 vaccine rollout after wide-ranging clinical-trial results and miscommunication with U.S. drug regulators prompted questions about the shot’s precise efficacy.

Production problems also hurt supplies, causing a high-profile political backlash in Europe. Additionally, rare blood-clotting problems associated with the shot, which have occurred in roughly one to two people out of 100,000 vaccinated in the U.K. and Europe, have dashed confidence in the vaccine, causing countries in Europe and ranging from Australia and Canada to the U.K. to limit or suspend its use. European health and government officials have said that the benefits of the vaccine generally outweigh its risks but recommend warnings about the potential risks.

At the same time, AstraZeneca remains a key supplier of vaccines to developing countries, as wealthier countries have bought up more expensive vaccines.

This story has been published from a wire agency feed without modifications to the text

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