The UK government is to pull out of a deal with the French pharmaceutical company Valneva to buy its Covid-19 vaccination, the company has said.
The move will come as a blow to the vaccine manufacturing site in Livingston, west Scotland, which was visited by the prime minister, Boris Johnson, in January.
About 100m doses of the yet-to-be-approved vaccine were put on order after the UK increased its request by 40m in February. But in a U-turn, the government has served notice to terminate the contract over allegations of a breach of the agreement.
Scotland’s health secretary, Humza Yousaf, told BBC Good Morning Scotland: “This is a blow for the facility in Livingston. We are very keen and will be reaching out to the company to try to get security and secure a future for that facility in Livingston; we hope that would be with Valneva.
“Clearly, when it comes to their supposed alleged failure to meet their contract obligations, we obviously are looking for more information from the UK government and would expect that shortly.”
The Livingston MP Hannah Bardell said: “This has come as a huge blow to my constituency, in which the facility is based. I will be working closely with Valneva – who have worked tirelessly on developing a vaccine to supply across the UK and indeed the world – to secure a future for the facility and the jobs it was due to create in Livingston and the surrounding area.
“I have written to the Speaker of the Commons and tabled an urgent question to ensure this issue gets the attention and scrutiny it deserves. 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.”
Valneva shares tumbled by about 40% in early trading on Monday. In a statement, the company said: “Valneva SE, a speciality vaccine company, today announced that it has received a termination notice from the UK government (HMG) in relation to the supply agreement for its Covid-19 vaccine candidate, VLA2001.
“The contract provides HMG with the right to terminate. HMG has alleged that the company is in breach of its obligations under the supply agreement, but the company strenuously denies this.”
Under the agreement between the government and Valneva, the UK can terminate the contract early in a relatively wide range of circumstances.
They include “material safety issues” with Valneva’s vaccine, evidence that it lacks efficacy, or a breakdown in supply. Financial difficulties such as insolvency and debt default, as well as a takeover of the company, can also trigger termination, although none of these appears to be the case.
The government can also tear up the contract if Valneva is found to have committed fraud or bribery, as well as over breaches of environmental, social or labour law, or non-compliance with tax law. Some of the triggers that allow the government to terminate the deal early have been redacted in the supply agreement.
Valneva declined to comment further on the reasons for the dispute. The Guardian has approached the government for further comment.
The vaccine candidate was in phase 3 trials, the company said, with results due in the fourth quarter.
“Subject to these data and MHRA [Medicines and Healthcare products Regulatory Agency] approval, Valneva believes that initial approval for VLA2001 could be granted in late 2021,” the company said.
“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. 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.”
