Shares of Valneva plunged 20% on Monday after the French drugmaker said its COVID-19 vaccine agreement with the European Commission was being scrapped and it may have to rethink its financial guidance.
Valneva said the European Commission had informed the company of its intent to terminate an advance purchase agreement (APA) for its COVID vaccine, which is currently under regulatory review by the European health regulator.
Valneva’s share price was down 20.5% at 9.5 euros, a one-year low, at 0845 GMT.
“The EC decision is regrettable especially as we continue to receive messages from Europeans who are looking for a more traditional vaccine solution,” CEO Thomas Lingelbach said in a statement.
Valneva’s vaccine relies on technology that has been used for decades, including in some shots against polio, influenza and hepatitis. The European Commission could not be immediately reached for comment.
Valneva signed a deal with the EC last November to supply up to 60 million doses of vaccine over two years, including 24.3 million doses in 2022.
The APA gave the European Commission the right to cancel the deal if the vaccine was not cleared for use by the European Medicines Agency (EMA) by the end of April.
It has not yet been given the green light by the EMA. Last month, the agency ask for additional information on the vaccine for the second time. On Monday, Valneva said it had responded to the latest request in early May.
Based on the terms of the APA, Valneva has 30 days from May 13 to win marketing authorisation or propose an acceptable remediation plan, the company said.
Valneva intends to work with the EC to agree to a remediation plan and to potentially make the vaccine available to those member states that still wish to receive it.
Based on the outcome of these discussions the company will reconsider its full-year 2022 financial forecast, it said. Valneva has previously said it expects to generate revenue of 430 million euros to 590 million euros ($448.58 million to $615.49 million) this year.
The company has faced a string of setbacks in recent months. It initially received a set of questions regarding its vaccine from the EMA in February. The hope had been that its response to that request would be enough for the EMA to conclude their assessment, particularly after that data was deemed sufficient by the British drug regulator.
British authorities did approve the vaccine, but the country scrapped its deal to buy the shot last year, alleging Valneva was in breach of its obligations. Valneva denied the charge.
Meanwhile, Valneva is in talks with the Scottish government to supply up to 25,000 doses to the National Health Service and frontline workers in Scotland.
Valneva scored its first approval in Bahrain and has since begun to deploy its vaccine there.