Biovac launches ambitious new expansion plan

Vaccine manufacturer Biovac has launched an ambitious drive to expand its Cape Town site, backed by the European Investment Bank (EIB) Group and the International Finance Corporation (IFC).

The financing package, announced on Thursday, will support Biovac’s plans to develop end-to-end vaccine manufacturing capacity, starting with oral cholera vaccines. The project is expected to help expand Africa’s vaccine manufacturing capacity for multiple diseases, and improve the continent’s health security in the event of future pandemics.

The deal includes a €75m (R1.45bn) quasi-equity investment from the EIB Group and a $20m loan from the IFC. The EIB Group’s quasi-equity is a form of long-term financing that provides flexible capital while sharing risk.

Biovac CEO Morena Makhoana said the incentive scheme for African manufacturers devised by the global vaccine alliance Gavi had helped create a more favourable environment for raising finance. “The global vaccine market is very bullish,” he said.

In 2023 Gavi launched the African Vaccine Manufacturing Accelerator, which offers milestone payments and a premium per dose to help emerging African vaccine manufacturers compete with established players.

The product portfolio will include several other vaccines targeting diseases that are prevalent in Africa, including pneumonia, meningitis, polio and rotavirus

Biovac was launched in 2003 to revitalise South Africa’s human vaccine manufacturing capacity. The government holds 47.5% of the shares in the compay, with the remaining 52.5% held by the Kahma group.

Biovac’s expansion drive, which aims to spend $150m on new infrastructure on vacant land recently purchased from the City of Cape Town, is expected to cost up to $253m.

The first facility planned for the new site will enable Biovac to begin manufacturing oral cholera vaccines in squeezable plastic tubes, which are easier to administer than vaccines produced in glass vials, said Makhoana.

Further funding announcements will be made in due course, he said.

The new oral cholera vaccine manufacturing facility is expected to be completed in 2028, and will ramp up production to between 30-million and 40-million doses a year, with the capacity to step up to 60-million doses a year if required, said Makhoana.

The new facility will also include a drug substance suite and a glass vial fill and finish suite, according to the IFC.

The product portfolio will include several other vaccines targeting diseases that are prevalent in Africa, including pneumonia, meningitis, polio and rotavirus.

This will save lives: protecting millions of children from serious illnesses and equipping scientists and health workers to safeguard their own communities. It shows how Europe is translating global partnerships into real benefits for people on the ground

—  Nadia Calviño, EIB president

EIB president Nadia Calviño said the bank was proud to support the production of vaccines in Africa, for Africa.

“This will save lives: protecting millions of children from serious illnesses and equipping scientists and health workers to safeguard their own communities. It shows how Europe is translating global partnerships into real benefits for people on the ground,” she said.

About half the manufacturing equipment will come from European suppliers.

Makhoana said Biovac’s expansion was expected to create about 350 new jobs and would more than offset the job losses triggered by Biovac’s loss of a key pneumonia vaccine contract with the health department three years ago. Biovac laid off 80 staff after the health department opted for cheaper pneumonia shots imported by Cipla.

IFC regional vice-president for Africa, Ethiopis Tafara, said Africa had a significant market for scaling resilient, high-quality vaccine manufacturing, and strengthening long-term health security across the continent. “Building local manufacturing capacity is both a development imperative and a strategic investment in resilience,” he said.

Business Day