By Promit Mukherjee
JOHANNESBURG (Reuters) -South Africa's Aspen Pharmacare took a step towards a licensing deal to package and sell Johnson & Johnson's COVID-19 vaccine in Africa, announcing on Tuesday it had signed non-binding terms with subsidiaries of the U.S. drugmaker.
While Aspen did not give a firm date on when it expects the deal to be finalised, Stephen Saad, chief executive of Aspen, told Reuters he is "hoping to get this (deal) out as soon as possible in 2022."
Aspen's shares rose sharply after the announcement, which was hailed by the World Health Organization (WHO) as a "transformative moment" in the drive towards greater vaccine equity. The shares were up by 6.3% at 1600 GMT.
If confirmed, the deal would make Aspen the first African company to have a right to distribute and price the vaccine, which it would market under its own brand name of Aspenovax.
"What is happening today is going to make a significant contribution to transforming production of vaccines ... in Africa," said Matshidiso Moeti, WHO Regional Director for Africa, at an online presentation of the deal.
She said the emergence of the Omicron variant of the coronavirus, first detected in southern Africa, had focused minds on the urgent need to diversify the manufacturing of vaccines as part of efforts to improve their availability.
Africa is the least vaccinated part of the world and many of its leaders have called for vaccine equity and accused Western countries of hoarding the shots -- calls given new urgency by the spread of Omicron.
However, the deal with J&J would not represent a technology transfer allowing Aspen to manufacture its own drug substance, something which the African Union's Strive Masiyiwa, who heads the Africa Vaccine Acquisition Task Team, said should be added.
"I urge Aspen and Johnson & Johnson to complete the commitment, which is that it must include substance production within the next two years," he said during the online presentation.
However, Saad told Reuters the company had not yet engaged in serious discussions with J&J for setting up a drug substance facility, also known as an active pharmaceutical ingredient (API) platform.
"It is our intention to have a vaccine API platform within Aspen in South Africa," Saad said, adding this would take at least a couple of years and would go ahead only if it made commercial sense.
Public health experts have called for technology transfers to help developing countries produce and access COVID-19 shots after rich nations bought up most early supplies.
Aspen now packages close to 300 million doses a year of J&J's COVID-19 vaccine at its South African plant, under a process known as "fill and finish", but has no power over the pricing or distribution of the product.
The company would expand the capacity to 400 million doses by the end of first quarter of 2022 and all of the additional capacity would be sold as Aspen-branded COVID vaccine to African countries, the CEO said.
Its deal with J&J would allow Aspen to make finished COVID-19 shots and sell them to African countries "through transactions with designated multilateral organizations and with national governments of member states of the African Union," Aspen said.
(Reporting by Promit Mukherjee; Writing by Estelle Shirbon; Editing by Emdund Blair and David Evans)