The Motley Fool

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

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.

5G is here – and shares of this ‘sleeping giant’ could be a great way for you to potentially profit!

According to one leading industry firm, the 5G boom could create a global industry worth US$12.3 TRILLION out of thin air…

And if you click here we’ll show you something that could be key to unlocking 5G’s full potential...

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.

There’s a ‘double agent’ hiding in the FTSE… we recommend you buy it!

Don’t miss our special stock presentation.

It contains details of a UK-listed company our Motley Fool UK analysts are extremely enthusiastic about.

They think it’s offering an incredible opportunity to grow your wealth over the long term – at its current price – regardless of what happens in the wider market.

That’s why they’re referring to it as the FTSE’s ‘double agent’.

Because they believe it’s working both with the market… And against it.

To find out why we think you should add it to your portfolio today…

Click here to get access to our presentation, and learn how to get the name of this 'double agent'!

Zaven Boyrazian owns shares in Oxford Biomedica. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

Where to invest £1,000 right now

Renowned stock-picker Mark Rogers and his select team of expert analysts at The Motley Fool UK have just revealed 6 "Best Buy" shares that they believe UK investors should consider buying NOW.

So if you’re looking for more top stock ideas to try and best position your portfolio in this market, then I have some good news for your today -- because we're offering a full 33% off your first year of membership to our flagship share-tipping service, backed by our 'no quibbles' 30-day subscription fee refund guarantee.

Simply enter your email address below to discover how you can take advantage of this.

I would like to receive emails from you about product information and offers from The Fool and its business partners. Each of these emails will provide a link to unsubscribe from future emails. More information about how The Fool collects, stores, and handles personal data is available in its Privacy Statement.