South African President Cyril Ramaphosa, right, heads a government delegation on a visit to ASPEN Pharmaceuticals in Port Elizabeth, South Africa, March 29, 2021. The company Aspen has begun production of COVID-19 vaccine for African countries. AP
"Today we are pleased to announce the intention for Johnson & Johnson to grant Aspen the rights to manufacture and sell Aspen's own brand of the vaccine in Africa," Aspen CEO Stephen Saad said in a statement.
The preliminary deal will "form the basis for negotiation of a definitive agreement on the manufacture and sale of an Aspen-branded Covid-19 vaccine throughout Africa," the statement said.
"In addition, Johnson & Johnson would grant Aspen a license to the enabling intellectual property for this purpose," the company added.
Africa has the world's lowest vaccination rate with fewer than seven percent of people fully vaccinated, mainly because of deep inequality of access compared with wealthy countries.
South Africa and India have led efforts to pressure advanced nations to lift intellectual property protections on coronavirus vaccines, hoping to produce low-cost generic versions for poorer countries.
"This announcement will make an important contribution to addressing vaccine inequality and building Africa's capacity to meet its own vaccine needs now and into the future," South Africa's President Cyril Ramaphosa said in the statement.
And Matshidiso Moeti, the World Health Organization's regional director for Africa, called it "an important step forward towards increasing Africa's manufacturing capacity and the push to ramp up access to vaccines".
Aspen's announcement follows the detection of the latest Covid-19 variant, dubbed Omicron, by South African scientists, triggering a fresh wave of global anxiety over the virus.
The company already packages J&J vaccines in a factory in southern South African city Gqeberha, but until now had no patent deal with the developer to give it power over sales and prices.
Aspen, Africa's largest drug maker, says it has packaged more than 100 million doses in South Africa, almost all of them for use on the continent.
It says it could produce up to 300 million J&J doses annually, aiming to boost that capacity to 700 million by January 2023.