US biotech firm Moderna and Spanish laboratory Rovi have announced a collaboration agreement to carry out the filling and finishing of a candidate vaccine for Covid-19 (mRNA-1273) outside the US.
Moderna is a pioneer in messenger RNA (mRNA) therapies and vaccines, while Rovi is dedicated to the research, development, licensed manufacture and marketing of small molecules and biological products. ROVI will carry out the phases of vial filling and completion. To do this it will acquire a new production line and the necessary equipment for formulation, filling, inspection and labelling, as well as the additional personnel required.
Although the new line would be owned by Rovi, it is Moderna who will make the investment. Through this agreement, it will supply markets outside the US, with capacity for hundreds of millions of doses from 2021. In Q1’21 they could have batches for approval and in Q2’21 would begin commercialization. ROVI’s experience as a manufacturer of injectables for third parties was fundamental in it being chosen.
ROVI’s third-party manufacturing business accounts for approximately 17% of sales, according to estimates by Banco Sabadell experts. It was already known that it could benefit from the scale production of a vaccine for Covid-19 since this is a market in which there are few players:
“We value the agreement with Moderna very positively as it has one of the most advanced vaccine projects (phase III begins in July’20) and it would not be a one-off (it is a multi-year agreement that would allow for the recurrent supply of vials of vaccine).”
Anyway, the impact of the news is very difficult to quantify due to still unknown variables. Firstly, the success of Moderna’s vaccine, which starts Phase III this month with 30,000 patients. In terms of efficiency and immunological coverage, it is the best candidate and is leading the way, together with AstraZeneca. Secondly, whether a single vaccine will be sufficient, although everything points to the need for a yearly vaccination. Thirdly, will a single dose be sufficient or will booster doses be necessary? And finally, it will depend on Moderna’s success in selling the vaccine.
Following the news, the stock price rose 7.42% to 27.50 eur/share which would be discounting a recurring positive impact of around 6 M euro at EBITDA level (10% of EBITDA’19).