Investors have begun 2021 in optimistic mood as FTSE 100 pharmaceutical giant AstraZeneca (AZN) begins the rollout of its coronavirus vaccine developed with Oxford University.
Around 530,000 doses of the AstraZeneca vaccine are reportedly ready for use today following its approval last week. It is hoped that tens of millions of people globally could receive it by the end of March.
Markets are pinning their hopes on Covid-19 vaccines being able to reduce transmission and/or infections and get most lockdown restrictions lifted by the middle of the year.
The initial reaction to AstraZeneca’s vaccine rollout has been positive with the benchmark FTSE 100 index jumping over 2.6% in morning trading to 6,630, and the midcap FTSE 250 bouncing 1.3% to 20,774.
ASTRAZENECA’S MIXED 2020
AstraZeneca’s vaccine in particular is seen as a key part of ending the pandemic, given its much lower price and easier storage and distribution compared to the Pfizer/BioNTech and Moderna vaccines for example.
Shares in AstraZeneca gained over 2.8% to £75.29 on Monday morning as the rollout began. The company’s shares had a mixed 2020, rising over £100 at one point over the summer before falling back to where they started the year at the £75 mark, with the firm committing to sell the vaccine at cost during the course of the pandemic.
Its share price also took a tumble in December as it acquired US rare diseases and immunology firm Alexion in an agreed shares and cash deal valued at $39 billion, or $175 a share, with the market seeing the acquisition as a distraction for the firm amid its vaccine rollout, while there were also concerns about the amount of debt it took on to fund the deal.
ANALYST VIEW
Shore Capital analyst Dr Adam Barker said the AstraZeneca vaccine could be ‘the most important’ in ending the pandemic, and adds that for most developing countries, mRNA vaccines like the Pfizer and Moderna ones - with their higher price and more difficult storage - simply won’t be viable options.
But many analysts including Dr Barker have cautioned on the pace of the rollout, and AJ Bell investment director Russ Mould warned there are still challenges ahead.
He said, ‘For now investors clearly believe the vaccine will provide the catalyst for a big recovery, perhaps after a tough first quarter, but getting enough of the population inoculated will be a big logistical challenge.
‘A key determining factor could be whether the existing vaccines prevent transmission of Covid or just infection - this could determine how quickly we return to normality and how patient the market might be.’
