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After claiming that the company violated its contractual obligations, the British government cancelled the agreement to purchase at least 100 million doses of COVID-19 vaccine from French pharmaceutical startup Valneva.
Valneva’s stock price plummeted on Monday due to news from the United Kingdom, which is the only country that has firmly committed to buying the company’s vaccine. The stock fell 40% to 12.02 euros (14 U.S. dollars) in European afternoon trading, after falling to 11 euros (13 U.S. dollars) before.
As part of the deal announced in September last year, the United Kingdom was an early supporter of the Valneva project and agreed to invest millions of pounds in a production facility in Scotland.
The UK has also agreed to purchase 100 million doses of vaccine, with an option of 90 million doses. The vaccine is in the advanced stage of human trials and has not yet been approved by regulatory agencies.
Varnieva said in a statement that the British government “claims that the company has violated its obligations under the supply agreement, but the company strongly denies this.”
“Valneva has been working tirelessly and doing his best to cooperate with (the government), including investing a lot of resources and working hard to deal with [the government’s] Request for variant-derived vaccines. “
Prime Minister’s spokesperson Max Blain said he could not comment on the government’s decision due to the government’s commercial sensitivity to the matter. He said the health authorities will comment in due course.
Valneva began submitting its vaccine data, VLA2001, to the UK drug regulatory agency last month. The company, which is headquartered outside Nantes in western France, said it expects to complete vaccine trials in the fourth quarter and may receive preliminary approval by the end of this year.
The company said: “Valneva will continue to work on the development of VLA2001 and will increase cooperation with other potential customers to ensure that its inactivated vaccines can be used to fight the epidemic.”
Before raising $108 million through a stock sale earlier this year, Valneva told investors that it must rely on its plants in Scotland and Sweden to meet its obligations under the UK agreement and any future agreements. Therefore, any restrictions on vaccine shipments in and out of the EU may hinder its ability to fulfill these contracts.
Earlier this year, the European Union threatened to restrict vaccine exports due to a dispute with drugmaker AstraZeneca over the delivery of its COVID-19 vaccine.
Valneva vaccine is based on a different technology from most vaccines approved by Western regulatory agencies and is currently the only vaccine based on chemically inactivated coronaviruses currently undergoing clinical trials in Europe.
The company said that this technology can provide benefits in terms of “safety, cost, ease of manufacturing and distribution,” and “can be adjusted to provide protection against viral mutations.”
Scottish Health Minister Humza Yousaf said the announcement was a “blow” at the Valneva production facility in Livingston, which began production of vaccines in January. The British government’s investment in the factory is expected to create 100 new high-paying jobs in the factory.
“We are very enthusiastic and will contact the company to try to ensure the safety of this facility in Livingston and ensure the future; we hope this will be with Valneva,” Yusuf told the BBC. “Obviously, when it comes to their alleged failure to fulfil contractual obligations, we are clearly seeking more information from the British government and will see soon.”
The termination of the agreement is not expected to have a direct impact on the UK’s mass vaccination plan. Even without the Valneva vaccine, the government has received enough doses to vaccinate the entire population.
According to the latest government data, nearly 81% of people aged 16 and over in the UK have been fully vaccinated.
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