Valneva Shares Plunge as Vaccine Deal with Europe Flounders
On Monday, Valneva saw almost a quarter of its market value plummet after the French company announced that its COVID-19 vaccine deal with Europe was in jeopardy.
European Commission may terminate the deal
The French drugmaker had made a deal with the European Commission (EC), which was a purchase agreement of about 60 million doses of the company’s COVID-19 vaccine. The company has been trying to salvage this agreement, as the EC hinted that it might pull out of it.
Thomas Lingelbach, the chief executive of Valneva, stated that they understood the European Commission’s dilemma. It has now ended up with excessive stock of vaccine doses. Therefore, the CEO said that they had proposed flexibility to the Commission in terms of delivery time, volume and also additional stability like extending the shelf life of the vaccine.
He believes the Commission will respond to the proposal in a few days. He stated that they had no intention of giving up before exploring every option. However, the company has warned that the initial indicators from the Commission show that the amended agreement will not have the same supply agreements to sustain the company’s vaccine program.
Lingelbach stated that the difference between the initial agreement and volume indications in the potentially amended deal will be quite significant. If they confirm the reduced order, then an amended agreement cannot be made.
Shares Plunge by 25%
Afternoon trading saw Valneva’s share plunge by almost 25%. Market analysts stated that the development was rather disappointing. This is because a forecast of almost 400 million euros in sales of COVID-19 vaccine had been made, mostly because of the deal with the European Commission. The adjusted forecasts no longer factor in any revenue from the EC agreement.
The delays in Valneva’s marketing application had delayed its vaccine program, as the European Medicines Agency (EMA) had asked for more information. Since then, the application has been accepted, but the company was not able to meet the April deadline of the Commission for approval in Europe. A recommendation from the EMA about the approval of the vaccine is expected on 21st June.
Previous setbacks for Valenva
Even though Valneva had managed to get approval for its vaccine in the United Arab Emirates and Bahrain, Britain had chosen to cancel its contract with the company last year. The technology used in Valneva’s vaccine is one that has been used for decades for vaccines of hepatitis, influenza and polio.
The company was betting that it would be able to draw in people who had refused to get the mRNA COVID-19 vaccines, or those with newer technology. However, there is uncertain demand for a new type of coronavirus vaccines. Even though it also uses traditional technology, Novavax from the US, has also seen limited demand in Europe. About 12.6 million doses had been distributed in Europe, but only 220,000 of them had been administered. Some vaccine manufacturers like Johnson & Johnson and AstraZeneca had warned of a global vaccine glut.