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Valneva shares fall as UK cancels COVID-19 vaccine order

The UK government has cancelled a supply agreement for French vaccine maker Valneva’s COVID candidate VLA2001 over an alleged breach of obligations.

French specialist vaccine company, Valneva, has announced that the UK government has terminated a supply agreement for its COVID-19 vaccine candidate, VLA2001.

The potential vaccine is currently in phase 3 trials in the UK, with data expected to be ready for regulatory review by the end of the year.

The company “strenuously denies” that it has breached its obligations under the agreement with the UK government (HMG).

“Valneva has worked tirelessly, and to its best efforts, on the collaboration with HMG including investing significant resources and effort to respond to HMG’s requests for variant-derived vaccines,” said the company in a statement. “Valneva continues to be committed to the development of VLA2001 and will increase its efforts with other potential customers to ensure that its inactivated vaccine can be used in the fight against the pandemic.”

The termination, which seems to have come without warning and with very little information, caused the company’s shares to fall by around 40% in early trading in Paris, wiping out nearly half its market cap, although the price rose later.

The agreement allows the UK government to terminate the contract early in a relatively wide range of circumstances including safety issues, lack of efficacy or a breakdown in supply as well as financial difficulties. However, none of these scenarios are evident as an explanation for the sudden termination.

The deal, which was worth up to €1.4bn, would have seen the vaccine manufactured at Valneva’s plant in Livingston in Scotland, which has received millions of pounds in government funding. The plant has already been upscaled to final industrial scale and deliveries were expected to start in 2022.

With few details of why the agreement was terminated, Member of Parliament for Livingston, Hannah Bardell, has tabled urgent questions in Parliament. “I will be challenging the UK government on this decision – they must provide details as to why the contract has been cancelled and ensure there is a future for the site, Valneva’s vital work and their staff. This has come as a huge blow to my constituency.”

VLA2001 is currently the only whole virus, inactivated, adjuvanted vaccine candidate in clinical trials against COVID-19 in Europe. Valneva says the candidate is intended for “active immunisation of at-risk populations to prevent carriage and symptomatic infection” with COVID-19, potentially for routine vaccination and for boosting.

Article by
Hugh Gosling

14th September 2021

From: Sales, Regulatory

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