British-Swedish pharmaceutical company AstraZeneca said Friday that it will start to book a modest profit from its coronavirus vaccine as it moves away from the nonprofit model it has operated during the pandemic.
In a third-quarter update, the company said it is "now expecting to progressively transition the vaccine to modest profitability as new orders are received." It said the "limited" profits from the vaccine in the fourth quarter will offset costs related to its antibody cocktail developed to prevent and treat COVID-19.
Until now, AstraZeneca said it would provide the vaccine "at cost" — around $2 to $3 — for the duration of the pandemic following an agreement with the University of Oxford, which developed the vaccine. Other COVID-19 vaccine producers, such as Pfizer and Moderna, have been booking hefty profits on their shots all along.
AstraZeneca confirmed Friday that it will not be making any coronavirus vaccine profits from developing countries.
The change came as AstraZeneca unveiled plans to set up a separate arm for vaccines and antibody treatments that focus on COVID-19. It marks the fact that AstraZeneca was only a minor player in the provision of vaccines before the pandemic.
In its update for the three months through September, the company said revenue jumped by about 50%, to a record $9.9 billion. The uptick was due to sales of more than $1 billion in COVID-19 vaccines and the inclusion for the first time of some $1.3 billion worth of revenue from its rare disease business unit following the recent acquisition of Alexion.
"While these two exceptional items skew year-on-year growth rates, the company is still carrying strong momentum and industry-leading growth rates from its core businesses in oncology, cardiovascular, renal and metabolism, and respiratory and immunology," said Daniel Chancellor of Informa Pharma Intelligence.
AstraZeneca said the positive sales trend is set to continue following eight positive phase three trials, including treatments for liver and prostate cancer.
"AstraZeneca's scientific leadership continues to provide strong revenue growth and exceptional pipeline delivery, with eight positive late-stage readouts across seven medicines since June, including our long-acting antibody combination showing promise in both prevention and treatment of COVID-19," Chief Executive Pascal Soriot said.
AstraZeneca also held firm on its earnings guidance for the year of $5.05 to $5.40 a share.