Africa’s largest drug manufacturer, Aspen Pharmacare Holdings, has signed a non-binding agreement with subsidiary firms of U.S. drug behemoth Johnson & Johnson (J&J), which will see it become the first African drug company to manufacture and sell COVID-19 vaccines in Africa.
The announcement comes nearly three months after the South African drug company announced that it is in talks with J&J to acquire a license to manufacture the vaccines.
Aspen Pharmacare Holdings Limited is a multinational South African holding company founded by South African pharma tycoon and billionaire businessman Stephen Saad.
The non-binding agreement signed with Janssen Pharmaceuticals, Inc. and Janssen Pharmaceutica N.V., subsidiaries of J&J, will form the basis for negotiating a definitive agreement on the manufacture and sale of an Aspen-branded COVID-19 vaccine throughout Africa.
The agreement includes the transfer of knowledge and the rights to manufacture finished COVID-19 vaccine products from drug substances supplied by J&J and the right to sell the finished form vaccine under Aspen branding to public sector markets in Africa.
In addition, J&J will grant Aspen a license enabling it to sell the vaccine under the brand name, “Aspenovax.”
The deal will run until Dec. 31, 2026. Aspen will see South Africa serve host to the continent’s first major independent manufacturing and distribution base for a global vaccine against COVID-19.
Aspen currently packages J&J’s COVID-19 vaccine at its South African plant under contract, which means that it does not have any pricing or distribution power over the product.
In reaction to the news, investors on the Johannesburg Stock Exchange intensified buying interest in Aspen, causing its shares to surge by 7.1 percent to R240.31 ($15) per share as of the time of writing.
At the current price, its market capitalization is R109.5 billion ($6.8 billion), while the market value of Saad’s 12.5-percent position is valued at R13.7 billion ($853.2 million).