Valneva’s Covid-19 Vaccine Contract in Dire Straits as EU Approval Lags

16/05/2022 - 3 minutes

The stock price of the French Covid-19 vaccine maker Valneva has been knocked down by 20% as the company faces losing a supply contract with the European Commission.

Despite receiving a glowing marketing authorization from the UK’s drug regulator in April this year, Valneva is struggling to gain traction with its Covid-19 vaccine in the EU. Just days after Valneva’s win in the UK last month, the EMA declined to recommend the approval of the vaccine until undisclosed questions were addressed surrounding the application.

This week, Valneva faces further pressure from the European Commission (EC). The two partners had inked a supply contract for almost 27 million doses of the Covid-19 vaccine in late 2021, and the EC had the right to cancel the deal if Valneva’s vaccine hadn’t been greenlit by the end of April. According to a public statement, the firm will lose the EC supply contract unless either the vaccine gains EU approval, or Valneva proposes an “acceptable remediation plan,” by mid-June. The company’s stock price sank by 20% in response to the revelation. 

The EC decision is regrettable especially as we continue to receive messages from Europeans who are looking for a more traditional vaccine solution,” stated Thomas Lingelbach, CEO of Valneva. “We have started a dialog with member states who are interested in our inactivated approach.” 

Valneva’s vaccine is based on a killed, whole version of the virus causing Covid-19. In contrast, most approved Covid-19 vaccines including mRNA vaccines deliver only a fragment of the virus. This means Valneva’s vaccine might be better at preparing the immune system against future variants of the virus. The candidate evoked an immune response against Covid-19 that was comparable to the effect of AstraZeneca’s viral vector vaccine in a phase III trial in 2021, with fewer side effects. 

Valneva has sent off answers to the EMA’s questions last month. The EMA began the formal review process for Valneva’s application this week and is expected to decide whether to recommend approval of the vaccine by June. In a conference call, the company explained that, while a June approval could miss the deadline for keeping the supply contract, Valneva is working on undisclosed remediation plans as an alternative option. 

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According to Peter Buhler, Valneva’s Chief Financial Officer, the company doesn’t need to return money that was paid upfront in the EC supply deal. “As such, we do not expect to run into any immediate cash constraints,” he added on the conference call. “We of course continue to carefully monitor our cash situation; we still have a very solid cash situation of more than €300M.

Valneva’s vaccine is now approved in Bahrain, the UK, and most recently in the United Arab Emirates. Although the vaccine was approved in the UK, the company doesn’t expect to roll out the vaccine there as the UK government terminated its supply contract last year. However, with a UK approval in hand, the firm plans to apply for authorization from the World Health Organization to market the vaccine in many low-income countries.

Valneva’s regulatory struggles and falling stocks occur as biotech stocks have a gloomy outlook around the world. French public biotechs are no exception, losing half of their value in the last 15 months. In contrast to big losers like Cellectis, Valneva appeared to be flying high against the trend, but its latest obstacles in the EU indicate it won’t be plain sailing for the French company.

19 May 2022: Article updated to include the EMA’s acceptance of the filing of Valneva’s vaccine authorization application.rnrnCover image via Shutterstock

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