AstraZeneca shells out up to $60M to reserve more coronavirus shot capacity with Oxford Biomedica

After a wave of supply deals, British drugmaker AstraZeneca is working to secure enough capacity to meet what could be a 3 billion-dose demand for its COVID-19 vaccine front-runner. To hit that lofty goal, AstraZeneca needs partners—and the company is tightening its embrace with one of them to help keep up. 

AstraZeneca will pay Oxford Biomedica an initial $20 million to reserve 1,000 liters of production capacity for its adenovirus-based COVID-19 vaccine, AZD1222, for at least 18 months, the companies said Monday. AstraZeneca is developing the shot with Oxford University.

The three-year manufacturing deal—with the second 18-month reservation optional—expands an initial pact signed in May between the two British companies for just one year and 200 liters of capacity.

Oxford Biomedica will set aside space in three manufacturing suites at its growing, 84,000-square-foot Oxbox facility through 2021. The initial 18-month commitment comes with the option of reserving those suites for an additional 18 months.

The CDMO, which specializes in viral vectors, expects to rake in at least $47 million in revenues above the $20 million down payment as it begins to churn out batches of AZD1222, Oxford Biomedica said in a release. 

Alongside its latest pact with AstraZeneca, Oxford Biomedica is close to bringing an additional two manufacturing suites online at Oxbox as part of a five-year deal with the U.K.'s Vaccines Manufacturing and Innovation Centre (VMIC). Oxford Biomedica said those two suites will be online within the next two months. 

While it plans to lock off space at its three currently operating production suites, Oxford Biomedica expects the AstraZeneca pact won't interrupt its work with existing customers. 

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Back in May, AstraZeneca and Oxford Biomedica inked their initial production deal for just one year and "multiple batches" of AZD1222, which recently entered phase 3 human trials.

Oxford Biomedica followed that up in June with its VMIC deal, which aimed to bump up production of the AstraZeneca shot as well as other viral vector-based vaccines.

In return, VMIC received "training and technical assistance" for its staff to scale up manufacturing of viral vector vaccines at a separate facility at the Harwell Science and Innovation Campus at Oxford, scheduled to open in mid-2021.

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AstraZeneca, meanwhile, has been working diligently to flesh out its supply chain in an effort to churn out more than 3 billion doses of its shot, which has emerged as a front-runner in the COVID-19 vaccine chase.

Last week, the EU agreed to pay AstraZeneca $396 million as a "down payment" for as many as 300 million doses of AZD1222. The pact has an additional 100 million-dose option at a later date.

The EU supply deal builds on an earlier pact between AstraZeneca and the European Inclusive Vaccines alliance led by Germany, Italy, France and the Netherlands. Under that deal, the four EU states agreed to buy 300 million shots for $843 million.

The U.S. reserved up to 300 million doses in an R&D and manufacturing scale-up pact with the Biomedical Advanced Research and Development Authority earlier this year.