Glaxo and Sanofi to Provide Covid-19 Vaccine to the U.K. We Dont Expect to Profit. – Barron’s

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As a growing list of drug companies sign deals to sell their still-unproven Covid-19 vaccines, a rift is opening between those that say they plan to profit off their vaccines and those that wont.

The British drugmaker GlaxoSmithKline (ticker: GSK) and its French partner Sanofi (SNY) said Thursday they had agreed to sell 60 million doses of their Covid-19 vaccine to the U.K. government.

The companies didnt say how much the government would pay. Speaking to journalists on Wednesday, Glaxo CEO Emma Walmsley drew a sharp line between her company and those that will sell their Covid-19 vaccines for a profit.

Our position has not been the same as some others, Walmsley said. Weve been very clear from the beginning that we dont expect to profit from these partnerships during the pandemic phase. Well be reinvesting any short-term profits in pandemic preparedness.

Walmsleys comments come amid a growing focus on Covid-19 vaccine pricing. The Financial Times reported on Tuesday that Moderna (MRNA) was seeking to sell its Covid-19 vaccine for between $25 and $30 a dose. Pfizer (PFE) is charging developed countries roughly $20 a dose.

I think its very wrong, Pfizer CEO Albert Bourla said in an interview on Tuesday of the argument that drug companies shouldnt be making a profit off the drugs and vaccines they introduce to fight Covid-19. You need to be very fanatic and radical to say something like that right now.

The price of Glaxos American depository receipts fell 0.6% in premarket trading on Wednesday, while Sanofis ADRs were up 1.5%. S&P 500 futures were up 0.3%.

Both companies also reported earnings Wednesday morning. Glaxo reported earnings of 0.19 per share, or about 25 U.S. cents, just below the S&P Capital IQ Consensus estimate of 0.20. Sanofi, meanwhile, reported earnings of 1.28 per share, or about $1.50, just above the S&P Capital IQ Consensus estimate of 1.22.

Glaxo and Sanofi said they aim to have their vaccine approved by regulators in the first half of next year. Though the program is progressing less rapidly than competing vaccines from Pfizer, Moderna, and others, it is based on a far more proven technology. While Pfizer and Moderna are developing messenger RNA-based vaccines, which have never received regulatory approval, the GlaxoSmithKline and Sanofi vaccine is based on a well-established technology that Sanofi uses in a flu vaccine already on the market.

Just over a week ago, Pfizer and its partner BioNTech (BNTX) announced a deal to provide 30 million doses of the Covid-19 to the U.K. government. The financial terms werent disclosed, though on an earnings call on Tuesday the president of Pfizers biopharmaceuticals group, Angela Hwang, said no developed country would pay less than the U.S. for similar volume commitments. The U.S. committed to pay $1.95 billion for 100 million doses, or around $19.50 a dose. At the same rate, the U.K. would have committed $585 million.

Sanofis U.S. traded shares are up 3.3% this year, while Glaxos are down 12.1%. The Dow Jones Industrial Average has fallen 7.6%

Write to Josh Nathan-Kazis at josh.nathan-kazis@barrons.com

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Glaxo and Sanofi to Provide Covid-19 Vaccine to the U.K. We Dont Expect to Profit. - Barron's