New figures reveal that the UK government’s decision to terminate a Covid vaccine contract resulted in a cost of £358.6 million to taxpayers.The French company Valneva was originally contracted to produce over 100 million vaccines at its facility in West Lothian. However, in a controversial move, the deal was scrapped in 2021.
Valneva’s financial records indicate that the company has received non-refundable payments amounting to hundreds of millions of pounds.
Last year, the UK government reached a final settlement with Valneva, and no further payments are owed to the company.
Ministers stated that all additional information regarding this resolution was considered commercially confidential at the time.
Valneva has announced its consideration of selling the unused Almeida plant in Livingston, which was initially constructed for the production of the Covid vaccine.
In September 2021, the UK government terminated its vaccine agreement with Valneva, citing allegations of a breach of the agreement. However, Valneva vehemently denied these allegations.
The amount paid by the UK government to Valneva is disclosed in a filing submitted to the Securities and Exchange Commission, a government agency in the United States.
According to the filing, Valneva has received a sum of €420.6 million (£358.6 million) under its vaccine supply agreement with the UK government.
The breakdown of the funds received by Valneva consists of €47.5 million (£40.5 million) as part of a “settlement agreement” following the termination of the deal, €78 million (£66.5 million) allocated for capital expenditure, and the remaining amount in non-refundable payments for manufacturing expenses.
The cancellation of the Valneva deal, according to the UK government, did not have an impact on the nationwide rollout of Covid vaccines.
Valneva currently has approximately 190 employees in Livingston, and the potential sale of the mothballed Almeida plant does not impact its existing operations in the town.
Valneva has enlisted the services of a commercial real estate firm to explore various possibilities for the 75,000 sq ft facility. The plant, constructed to meet the rigorous technical requirements of vaccine production, is now under consideration for alternative uses.
According to Valneva’s CEO, Thomas Lingelbach, approximately twelve potential buyers have shown interest in the site, as reported by Bloomberg News last month.
As per the initial agreement between Valneva and the UK government, the French company was obligated to repay £69.8 million of the advances it received if the Almeida plant was sold or if it ceased Covid vaccine production.
As per Valneva’s financial statement, the obligation mentioned expired on December 31st of the previous year. Additionally, Scottish Enterprise granted Valneva up to £20 million in grants last year to aid its future growth and vaccine development efforts.
Out of the support provided by Scotland’s economic development agency, a sum of £4.3 million has been utilized to date. A spokesperson from Valneva stated that the company is currently considering various options for its Almeida manufacturing facility in Livingston. These options include a potential sale or repurposing of the facility to manufacture its vaccine for Japanese Encephalitis and, if approved, its chikungunya vaccine.
Source : bbc.com