AstraZeneca (AZN): Gilead Sciences (GILD) Merger Talks, Oxford University Vaccine Plans, Bill And Melinda Gates Foundation Partnership

By Amit Chowdhry ● June 7, 2020
  • AstraZeneca plc (NYSE: AZN) announced it has started manufacturing experimental coronavirus vaccines developed by Oxford University and the company is reportedly in talks with Gilead Sciences, Inc. (NASDAQ: GILD) about a merger

British pharmaceutical giant AstraZeneca plc (NYSE: AZN) announced it has started manufacturing experimental coronavirus vaccines developed by Oxford University. And the company also made a deal with The Bill And Melinda Gates Foundation. The development of the University of Oxford’s potential coronavirus vaccine is ahead of the trial results. And AstraZeneca has doubled its capacity to two billion doses.

“We are actually starting to manufacture right now, we are not going to wait until we get the clinical results. That’s the financial risk that is taken and it is going to be shared with organizations we are partnering with,” said Soriot via BBC World News.

AstraZeneca CEO Pascal Soriot said that the company was not going to wait for clinical results to push forward. The clinical results were expected to be announced in August.

And AstraZeneca — which agreed to provide the doses in the UK and the US — also revealed it signed agreements for supplying the vaccine to lower and middle-income countries through health organizations, including two backed by Microsoft co-founder Bill Gates.

In total, AstraZeneca signed $750 million in agreements from two health organizations that are backed by The Bill And Melinda Gates Foundation: the Coalition for Epidemic Preparedness Innovations and the Gavi vaccine alliance (provides doses around the world). Plus AstraZeneca said it was going to provide the Serum Institute of India with 1 billion doses for lower and middle-income countries along with committing 400 million before the end of 2020.

Oxford University started human trials at the end of April and researchers were planning to see whether the vaccine was working by July. The coronavirus vaccine could potentially become available for users in the UK by September if the trial is successful. And 300 million would become available in the U.S., which would first become available around October.

Last month, AstraZeneca said it received over $1 billion in U.S. funding for accelerating the development of the experimental vaccine. This agreement included a requirement that America would get 300 million doses. This deal was made between AstraZeneca and the U.S. Biomedical Research and Development Authority — which included a Phase 3 clinical trial in the U.S. with 30,000 volunteers over the summer.

The Trump administration’s “Operation Warp Speed” program also supports vaccines developed by Moderna, Sanofi, and Johnson & Johnson. AstraZeneca owns a 7.7% stake in Moderna.

Gilead Sciences, Inc. (NASDAQ: GILD) Merger Talks

In related news, AstraZeneca is reportedly in talks with Gilead Sciences, Inc. (NASDAQ: GILD) about a potential merger according to Bloomberg’s sources. AstraZeneca contacted Gilead last month to discuss a potential merger and the terms for the transaction were not specified. AstraZeneca is currently valued at about $140 billion and Gilead is at about $96 billion.

However, it was reported that Gilead is not interested in merging or selling with another large pharmaceutical company according to Bloomberg’s source. Instead, Gilead is preferring to focus its deal strategy on partnerships and small acquisitions.

Disclosure: I own a small number of Gilead and AstraZeneca shares