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The UK government has cancelled its agreement to buy 100 million doses of Valneva's Covid-19 vaccine, after claiming the French drugmaker was in breach of its obligations.
Valneva on Monday denied the allegation but did not disclose precisely what is being contested.
The termination came a year after the British government invested in a Valneva manufacturing site in Livingston, Scotland.
Alok Sharma, the UK business secretary at the time, said the multi-million-pound, upfront investment meant Valneva's vaccine could "be manufactured in quantity right here in Scotland".
The company's stock almost quadrupled in the past year on optimism its shot would complement existing vaccines with a different approach.
Valneva's product is an inactivated vaccine, a traditional method also used for polio and hepatitis inoculations. Because it targets the whole virus rather than just the spike protein, some scientists expect it could potentially stand up better to variants.
Trials of the vaccine in April showed it produced a strong immune response in nine out of 10 patients.
“Innovation means taking risks,” Olivier Nataf, head of rival vaccine maker AstraZeneca, told France's BFM radio on Monday.
“This is clearly a blow. It’s important to have a new vaccine, a new technology that would complement the others.”
Valneva said it expects the vaccine could receive initial approval later this year.