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‘s American depositary receipt dropped almost 40% after the French company said the U.K. government had canceled a deal to buy 100 million doses of its experimental Covid-19 vaccine.
Valneva’s (ticker: VALN) ADR was down 38.5% in premarket trading. In a statement issued early Monday, the company said that the U.K. government had terminated the deal after claiming that Valneva had not lived up to its obligations.The vaccine developer said it “strenuously” denied the charge.
If the U.K. had bought the 100 million doses it had contracted for, plus another 90 million that it had an option to purchase, the deal would have been worth €1.4 billion, or $1.7 billion, according to Valneva.
Valneva said it would continue to develop its Covid-19 vaccine, known as VLA2001, and that it expected to have data on a Phase 3 trial early in the fourth quarter of this year.
“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,” the company said. “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 BBC reported Monday that a spokesman for U.K. Prime Minister Boris Johnson had said that the cancellation of the contract won’t affect the country’s vaccine supply, and that the U.K. hadn’t been counting on doses from Valneva this fall or winter.
Shares of Valneva’s competitors jumped. Stock in
(NVAX), which has struggled to get its vaccine to market despite positive study results, was up 2.8% in premarket trading on Monday. Shares of
(MRNA) gained 1.7%.
Valneva’s Covid-19 is an inactivated whole virus Covid-19 vaccine, the only one of that type that is in clinical trials in Europe, according to the company. The inactivated whole virus approach is more traditional than the approaches behind the Moderna,
Johnson & Johnson
(JNJ) vaccines, though it brings its own challenges.
The vaccine uses an adjuvant supplied by
(DVAX). Dynavax shares were down 9.3% in premarket trading.
Valneva has a market value of $2.4 billion. It is also partnering with
(PFE) on a Lyme disease vaccine, and sells vaccines for Japanese encephalitis, among other diseases.