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AstraZeneca has raised doubts about the future of its vaccine business after damaging clashes with the European Union and regulators around the world over its non-profit Covid jab.
The company is considering a shake-up which could turn the coronavirus vaccine unit into a profit-making division, lead to a partnership with another player in the industry or culminate in a spin-off, sources said.
It is the first time the FTSE 100 pharma giant has publicly confirmed that it is reviewing the future of the business.
Ruud Dobber, head of Astra's biopharmaceuticals unit, told Reuters: “We are exploring different options. Before year-end, we will have more clarity.
"Is the vaccine businesses a sustainable business for AstraZeneca for the next five or 10 years? That big strategic question is under discussion."
Manufacturing issues and slow uptake of the Oxford/AstraZeneca jab, fuelled by misleading reports and politically motivated rumours surrounding its safety and efficacy, have hampered the pharmaceutical titan's efforts to become the global supplier of an affordable vaccine.
But Mr Dobber insisted that Astra has no regrets about developing the Covid jab given that all pharma companies have a shared enemy in the virus itself. The Cambridge-based company has delivered more than a billion doses of the jab, which it developed in partnership with Oxford University.
Asked if Astra should have done anything differently, he said: “I personally don't have any regret that we moved into this quite substantial project."
Pascal Soriot, AstraZeneca’s chief executive, said he was proud of the vaccine but admitted the company had hoped to deliver more.
In contrast to peers such as Pfizer and Moderna, which have reaped huge financial rewards from their vaccine development programmes, Astra committed to selling its jab at no profit and has made it widely available to the developing world.
The British company booked $900m (£644m) of sales from its vaccine in the second quarter of the year, far below than the $7.8bn reported by Pfizer.
Astra's vaccine was subjected to months of criticism on the Continent and further afield because of early manufacturing delays and concerns it could cause blood clots in a vanishingly small number of cases. In Britain, officials have argued that European Union opposition was driven by envy and the politics of Brexit. A study submitted to The Lancet medical journal this week found that the Astra jab has a similar safety profile to Pfizer's.
Mr Soriot said: “We don’t envy anybody and our colleagues at Pfizer have done a beautiful job and we are all working to the same goal to bring vaccines to people [all over] the world and the need is gigantic so everyone is doing their best.
“None of the vaccines are perfect, we have never pretended ours is, they all have different profiles, but it’s a great vaccine with high efficacy and safety profile.”
Adam Barker, an analyst at Shore Capital, said he does not think that Astra will expand its vaccines business because this would be such a big financial commitment. He added that Oxford owns the intellectual property rights to the technology.
Mr Barker said: "There's very high barriers to entry and most of the costs of a vaccine are establishing a large manufacturing footprint, and during the pandemic, AstraZeneca effectively just out licensed the manufacturing.
"If AstraZeneca decided to go into vaccines, it would be a really big decision for them off a one-off experience."
He said that Astra is instead likely to keep hold of the Covid vaccine, update the licence every year and pay Oxford a royalty. Mr Barker added: "The alternative is they just sell it on, or perhaps give it back to the University of Oxford."
Emily Field, an analyst at Barclays, said while it is too soon to make a call on what would happen with the vaccines business, an eventual sale could be one clean option. Astra bought US rival Alexion in a $39bn deal earlier this year and is eyeing expansion in other areas instead.
She said: "This is a one-off for AstraZeneca as vaccines are not its core competency, particularly with its move into rare diseases after acquiring Alexion.
"Probably selling it to someone else who has a vaccine core competency would be a win-win for everyone."
The largest vaccines players in the world include Glaxosmithkline, Sanofi, US Merck and Pfizer.
MS Field added: "AstraZeneca is still reporting revenues that separate out the Covid vaccine, which I think tells you a lot.
"Pfizer's guidance for sales includes the vaccines and GSK is reporting Covid vaccine stuff as part of its regular revenue, so from an accounting basis keeping that revenue on a separate line tells you it probably won't be part of AstraZeneca in its current form all that much longer."
It came as AstraZeneca reported a 23pc rise in revenue to $15.5bn in the first half of its financial year, driven by strong sales from its latest cancer treatments and kidney and diabetes drug Farxiga.
Pre-tax profit rose by a quarter to $2.4bn. The company’s profit margins, however, were squeezed because of its efforts to develop and roll out the vaccine at cost.
Mr Soriot said AstraZeneca was on track to achieve its third consecutive year of double digit sales growth.
Shares rose 0.8pc in afternoon trading to £83.34, valuing the company at £128bn - by far the biggest member of the FTSE 100, worth £23bn more than closest rival Unilever.