Local pharmaceutical company to produce vaccine

By Sandile Mchunu for IOL

Aspen Pharmacare Holdings added nearly R5 billion to its value yesterday after the South African pharmaceutical company said it had invested billions to manufacture the investigational Covid-19 vaccine with US giant Johnson & Johnson.

Aspen said its wholly-owned South African subsidiary, Aspen Pharmacare, had entered into a preliminary agreement with Janssen Pharmaceuticals Inc and Janssen Pharmaceutica NV – two of the Janssen Pharmaceutical companies of Johnson & Johnson – for the technical transfer and proposed commercial manufacture of their Covid-19 vaccine candidate, Ad26.CoV2-S.

The vaccine candidate is undergoing clinical trials at the existing sterile facility in Port Elizabeth.

Aspen chief executive Stephen Saad said the group planned to be a key part of the efforts to find a vaccine for a pandemic that had killed hundreds of thousands of people across the globe.

Saad said the group would utilise all its resources to provide assistance for patients in need across the world from their South African base.

“We have invested globally in our sterile capability and are determined to play a role in the manufacture of vaccines to add to our proud track record of making contributions to humanity in times of global pandemics,” Saad said.

“This has included, inter alia, being a leading global supplier for antiretrovirals for the treatment of HIV/Aids, multi-drug-resistant-TB products and Covid-19-related treatments, such as anaesthetics and dexamethasone. We have been selected as a vaccine partner by Johnson & Johnson, and this project will receive priority focus.”

Saad said Aspen would perform formulation, filling and secondary packaging of the vaccine for supply to Johnson & Johnson.

He said the agreement was, however, subject to the successful completion of the relevant technology transfer activities and finalisation of certain commercial manufacturing terms.

The group’s shares rose 11.45 percent to close at R117.64 on the JSE yesterday, pushing its market cap above the R50bn mark.

Michael Treherne, a portfolio manager at Vestact, said the share price movement was extraordinary for a group.

“The announcement is positive on two fronts. First, it is the potential for increased business, and second, it is a vote of confidence from one of the biggest pharma companies in the world. The way I understand it, Aspen has already spent R3bn on the facility, but it is also worth noting that an agreement has not been signed yet,” Treherne said.

In August, Aspen said its annual earnings were expected to increase as much as 11 percent.

The group said normalised headline earnings per share from continuing operations for the year to the end of June were likely to increase between 7 and 11 percent, to between 1 438.9 cents and 1 492.8c, from 1 344.8c last year.

It said normalised headline earnings per share was the primary measure used by management to assess Aspen’s underlying financial performance.

Yesterday, the group said it would provide the necessary capacity required for the manufacture of Johnson & Johnson’s Covid-19 vaccine candidate.

It said it had invested in excess of R3bn in the facility together with the high technology equipment and systems that would be used to manufacture state-of-the-art sterile drugs and vaccines, packaged into vials, ampoules and pre-filled syringes.

The group said the area where it is intended to develop the vaccine candidate would have capacity to produce more than 300 million doses a year.

Nesan Nair, a senior portfolio manager at Sasfin Securities, said the development boosted Aspen’s net worth.

“It is great news both for the fight against the Covid-19 pandemic and for Aspen … as well as for the fact that this vaccine will also be manufactured in South Africa,” Nair said.

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