AstraZeneca’s Covid-19 vaccine approved! Here’s what I’d do now

Approval for AstraZeneca’s vaccine brings the UK a step closer to winning the fight against Covid-19. But is there a better investment opportunity than AZN?

| More on:

The content of this article was relevant at the time of publishing. Circumstances change continuously and caution should therefore be exercised when relying upon any content contained within this article.

Hand flip wooden cube with word wealth to health.

Image source: Getty Images

AstraZeneca‘s (LSE:AZN) Covid-19 vaccine has been approved for emergency use in the UK this morning.

There had been some confusion surrounding the initial trial dosing regimens and subsequent results. However, the pharmaceutical giant was successful in proving the vaccine is both effective and safe.

Inflation Is Coming

Inflation is out of control, and people are running scared. But right now there’s one thing we believe Investors should avoid doing at all costs… and that’s doing nothing. That’s why we’ve put together a special report that uncovers 3 of our top UK and US share ideas to try and best hedge against inflation… and better still, we’re giving it away completely FREE today!

Click here to claim your copy now!

What’s next for AstraZeneca?

Working alongside the NHS and other government bodies, AstraZeneca aims to deliver 100 million doses over the next year, with the first batch ready very soon. This is over double the 40 million doses ordered for Pfizer’s vaccine, and over 14 times those ordered for Moderna’s.

I previously wrote that AstraZeneca’s vaccine would become the best choice for the UK and countries worldwide. And I’ve been right so far. You see, despite the higher efficacy of both Pfizer’s and Moderna’s vaccines, they both suffer from a significant disadvantage. They require extraordinary refrigeration of -70°C, and -20°C, respectively, whereas AstraZeneca’s only needs to be kept between 2°C and 8°C. That’s a standard fridge temperature.

Storage facilities in the UK and abroad that can support such sub-zero temperatures are few and far between. This drastically reduces the viability of storage and distribution for Pfizer’s and Moderna’s vaccines, especially in poorer nations.

It’s for this reason that Malaysia has ordered an additional 6.4m doses of AstraZeneca’s vaccine. Furthermore, the company is working closely with its global partners to set up the infrastructure needed to manufacture up to 3bn doses every year.

A hidden gem in the biotech sector

This is undoubtedly fantastic news for AstraZeneca and the public in general. But I won’t be buying shares in the business. Despite the stock being up on the announcement, it’s important to remember that AstraZeneca has stated its vaccine is a no-profit project.

But there’s one stock that greatly benefits from this announcement — Oxford Biomedica (LSE:OXB) — a share that I myself have bought.

The biotech firm specialises in gene and cell therapies. It has been working closely with AstraZeneca throughout the development of the vaccine. The stock offers a proprietary platform called LentiVector, which allows drug developers to pursue new treatments at a fraction of the cost.

In September, Oxford Biomedica signed an 18-month supply agreement with AstraZeneca for its vaccine’s large-scale manufacture. It has already received an initial payment of £15m to get things going and expects to generate another £35m throughout 2021.

The combined additional £45m represents 80% of the firm’s revenue in 2019. After adding the income it makes from its other projects, this agreement will likely double the firm’s total revenue in a single year.

And what’s more, the signed agreement can be extended by another 18 months. With AstraZeneca aiming to supply those 3bn doses worldwide, this seems quite likely to happen in my mind.

The bottom line

Oxford Biomedica’s revenue from the vaccine may not be sustainable in the future. However, it provides a surge of additional income that will allow it to bolster its LentiVector platform further.

For that reason, even at its current valuation, the stock looks cheap in my eyes, given its potential to shape the drug development industry’s future.

More on Investing Articles

Portrait of elderly man wearing white denim shirt and glasses looking up with hand on chin. Thoughtful senior entrepreneur, studio shot against grey background.
Investing Articles

I bought these 4 cheap shares for a market recovery

After months of sitting on my hands, I've finally taken the plunge by buying four cheap shares. Of course, their…

Read more »

Young brown woman delighted with what she sees on her screen
Investing Articles

Here’s why I’m buying more shares in one of my best stocks to buy!

This Fool explains why he is planning on adding further shares of one of his holdings to boost his portfolio.

Read more »

Bearded man writing on notepad in front of computer
Investing Articles

Just 6% of investment trusts make positive return in H1! What should I do?

The returns from investment trusts have so far disappointed this year. Here's why I plan to continue splashing the cash…

Read more »

Smiling young man sitting in cafe and checking messages, with his laptop in front of him.
Investing Articles

Could this FTSE 100 stock be a bargain to buy and hold?

This Fool believes there are some excellent bargains to be had on the FTSE 100 and details one he is…

Read more »

Shot of a senior man drinking coffee and looking thoughtfully out of a window
Investing Articles

Are these the best income shares to buy in 2022?

Andrew Woods wonders if he should add these two companies to his portfolio to create a consistent income stream.

Read more »

Portrait of elderly man wearing white denim shirt and glasses looking up with hand on chin. Thoughtful senior entrepreneur, studio shot against grey background.
Investing Articles

At 41p, are Lloyds shares now too cheap to miss?

As interest rates rise, Andrew Woods asks if now is the time to load up on Lloyds shares.

Read more »

Smiling young man sitting in cafe and checking messages, with his laptop in front of him.
Investing Articles

2 dirt-cheap UK shares to buy right now!

Stock market volatility remains very high. This presents excellent opportunities for investors to buy mega-cheap UK shares like these two…

Read more »

Shot of an young Indian businesswoman sitting alone in the office at night and using a digital tablet
Investing Articles

Should I buy soaring Abrdn stock? Or am I too late?

Abrdn stock jumped 8% in Wednesday morning trading. The share price has tanked this year, so maybe its fortunes are…

Read more »