Will AstraZeneca shares move higher after China Covid-19 vaccine deal?

AstraZeneca has trended lower this week, returning to levels seen throughout June after the stock rallied to an all-time high of £93.20 per share in mid-July. However, the drug maker is well-positioned to see its shares soar once again after signing the first Covid-19 vaccine deal with China.

The deal will see China-based Shenzhen Kangtai Biological Products produce AstraZeneca’s potential Covid-19 vaccine in mainland China – securing the drug maker's pole position in the global race to deliver a cure for the coronavirus pandemic.

AstraZeneca is trading at £83.16 per share at the time of publication, with the stock up 9% year-to-date.

AstraZeneca: outlook for 2020

AstraZeneca CEO Pascal Soriot praised his employees for the company’s strong performance in its half-year (H1) results at the end of July, with the business delivering further revenue growth that has helped improve profitability and cash generation.

The drug maker has performed particularly well in emerging markets and has seen success with its newly developed medicines, along with the company becoming a leader in the fight against Covid-19.

‘Looking ahead, while we continue to anticipate variations in quarterly performance, the continuation of our strategy makes us confident about the future,’ Soriot said.

‘We are retaining our full-year guidance that is underpinned by the focus on commercial execution and an exciting pipeline of new medicines,’ he added.

Total revenue is expected to increase by a high single-digit to a low double-digit percentage in 2020 and core earnings per share is expected to increase by a mid- to high-teens percentage, according to AstraZeneca’s own guidance which has been left unchanged.

AstraZeneca-Oxford University Covid-19 vaccine produces immune response

AstraZeneca shares are likely to get a boost after its partnership with Oxford University has shown promising results from early stage trials for a potential coronavirus vaccine.

In fact, a new study published earlier this month in the scientific journal, The Lancet, showed that a team of scientists from Oxford University’s Jenner Institute and Oxford Vaccine Group have created a Covid-19 vaccine that induces a strong immune response to the virus.

'We are encouraged by the Phase I/II interim data showing AZD1222 was capable of generating a rapid antibody and T-cell response against SARS-CoV-2,’ Mene Pangalos, executive vice-president of BioPharmaceuticals R&D at AstraZeneca, said.

‘While there is more work to be done, today’s data increases our confidence that the vaccine will work and allows us to continue our plans to manufacture the vaccine at scale for broad and equitable access around the world,’ he added.

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