Astra Posts Solid U.S. Phase 3 Data for Vaccine

AstraZeneca AZN reported strong U.S. phase 3 data for its COVID-19 vaccine, AZD1222. We don't expect any changes to our fair value estimate based on the favorable data, however, since the firm plans to sell the vaccine on a not-for-profit basis. Nevertheless, the strong data and fast development timeline should help build goodwill with governments that could be helpful in keeping overall drug pricing policies stable, which is a key assumption in our wide moat rating. In the phase 3 study, Astra's vaccine showed a solid 79% efficacy level in preventing symptomatic COVID-19, which was better than we had expected. Prior phase 3 trials conducted outside the United States saw average efficacy around 67%, a number that was boosted by some patients receiving two doses with a wider time interval than in the U.S. study, so we had expected lower efficacy in the U.S. trial. While cross-trial comparisons carry several drawbacks, AZD1222 looks potentially more effective than Johnson & Johnson's one-dose vaccine, which showed 72% efficacy in U.S. volunteers and 67% efficacy overall, but less effective than those of Pfizer/BioNTech and Moderna, which were both close to 95% efficacy. Importantly, though, the Astra vaccine showed 100% protection against severe disease in the trial and also showed strong efficacy in elderly volunteers. Complicating comparisons is the rise in variants of COVID-19, which may have weighed more heavily on Astra's trial due to its recency, although the most worrisome South Africa variant was likely not seen, at least in large numbers, in this largely U.S.-based trial. With clinical development delays last year due to potential side effects and some European nations recently halting emergency use of Astra's vaccine (for a short period) partly due to blood clotting issues, safety concerns have mounted around Astra's vaccine, but the phase 3 data should offer some reassurance.

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