UK cancels €1.4bn Covid vaccine deal with France’s Valneva

Shares fall by a third in French biotech involved in late-stage vaccine trials

The UK has terminated an agreement with France-based biotech company Valneva for the supply of at least 100 million doses of Covid-19 vaccine, saying the company was in breach of its obligations under the deal.

The company "strenuously" denied the claim in a statement on Monday. The deal was worth up to €1.4 billion, with manufacturing planned to take place in Scotland and deliveries set to start in 2022.

Valneva’s share price fell 42 per cent to €11.50 in early trading in Paris.

Ireland is in line to receive 300,000 doses of the Valneva vaccine as part of an EU-wide order.

The company’s vaccine candidate uses a whole inactivated virus to elicit an immune response against coronavirus, a technique that can prolong the manufacturing process but provides greater coverage against all variants. Most other shots are designed to target the spike protein of the virus.

The company had previously warned that exporting vaccines between the EU and Britain would be a “substantial risk” to its plans, because of its supply chain.

It was not immediately clear what had pushed the UK government to serve notice of termination.

The vaccine is in late-stage trials, with results expected in the fourth quarter and UK approval possible before the end of the year, Valneva said.

Given this timeline it is unlikely the shot would have played an immediate role in an upcoming booster campaign, which the UK government is planning for the autumn on a mix-and-match basis, giving patients a third shot that is different from the two they received earlier in the vaccination drive.

Health officials across the world have said that having a wider portfolio of vaccine options, using different technologies, is the best way to hedge against efficacy problems or supply issues.

The drug-maker said in its statement it had worked “tirelessly, and to its best efforts” on its collaboration with the UK, adding it would increase its efforts to ensure its vaccine could be used against the virus by other potential customers.

Paris-listed shares in the company lost as much as 44 per cent in morning trade on Monday, and were last trading 35 per cent lower. – Copyright The Financial Times Limited 2021