AstraZeneca (AZN -1.41%) is boosting its manufacturing capacity for the company's yet-to-be-approved coronavirus vaccine, AZD1222, through a supply agreement with U.K.-based Oxford Biomedica. AstraZeneca has reserved up to three manufacturing suites in Oxford's new manufacturing facility for 18 months. The companies can mutually agree to extend the supply agreement for an additional 18 months.

Oxford will receive 15 million British pounds, about $20 million, to reserve the manufacturing capacity and expects to receive more than 35 million pounds plus the costs for certain materials required to manufacture AZD1222 through the end of 2021.

The companies didn't disclose how many doses the reserved capacity could manufacture over the 18-month contract.

Gloved hands giving an injection into a shoulder

Image source: Getty Images.

AZD1222, which was licensed from the University of Oxford, uses an inactivated virus based on a weakened version of a common cold virus to deliver genetic material that expresses a protein from the novel coronavirus. Once the protein is made by the patients' cells, the immune system recognizes the protein as foreign, developing antibodies that will hopefully protect patients from getting COVID-19.

AstraZeneca is running late-stage clinical trials in the U.K., Brazil, and South Africa and started a new 30,000-patient study in the U.S. this week. Data from the studies are expected later this year, but unlike some of its competitors, the pharma giant hasn't committed to an exact time frame for when investors can expect the results. Proving that AZD1222 can protect patients from getting COVID-19 requires patients who receive placebo to get infected with the coronavirus, a variable that AstraZeneca doesn't have control over.