Covid-19 vaccine next big win for Astra?

ASTRAZENECA’s bid to produce the world’s first Covid-19 vaccine is facing a moment of truth, with results from a major trial expected within weeks.

The British drugs group has teamed up with scientists from Oxford University, who are developing the potential shot, and on Thursday last week it was handed a £1bn boost from the US government.

It is the latest big bet made by Astra boss Pascal Soriot, who has overseen the company’s transformation from laggard to industry leader over the past eight years.

Under the Frenchman, Astra prioritised research and development of potentially lucrative cancer drugs which have gone on to become blockbuster hits, generating billions of pounds in revenues to replace its medicines that have lost patent protection.

The scale of the turnaround was underscored recently when Astra overtook Unilever and Shell to become the UK’s most valuable listed company, worth £118bn.

Arch-rival Glaxosmithkline, although bigger in terms of revenue and headcount, trails behind with a valuation of £83bn.

And analysts said Astra’s resurgence has also vindicated Soriot and chairman Leif Johansson’s defence of the company against a hostile takeover bid attempted by US rival Pfizer in 2014. They rebuffed Pfizer’s attempts to buy the British firm for just 5500p per share – or £69bn – going against the wishes of major investors who wanted them to engage.

However, since then shares have more than doubled in value and outperformed the FTSE 100 index. They are up 107pc since May 2014, when the Pfizer bid was dropped, compared to the blue chip index’s rise of just 11.8pc over the same period.

According to analysis by investment platform AJ Bell, when dividends are included Astra’s returns to shareholders represents an increase in value of 163.4pc.

Russ Mould, AJ Bell’s investment director, said: ‘The performance of Astrazeneca’s shares over the five years since Pfizer scrapped its bid offers a good example of how stock markets are get-rich-slow schemes when they are used properly.

‘The healthy returns made by shareholders are also a timely reminder that investors – and company executives – should always focus on the development of products and services that serve a purpose and not financial engineering.’

Results from Oxford University vaccine trials are expected next month.

In a note to clients, analysts at UBS said Astra was on course to make its first deliveries of the shot in September.

The analysts added: ‘With capacity in place or at least committed, the vaccine now needs to work.’