We think AstraZeneca is undervalued: Director of healthcare equity research
The European Union filed a lawsuit against AstraZeneca Plc, raising the stakes in the spat between the drugmaker and the bloc’s 27 governments over vaccine deliveries.
The company failed to come up with a “reliable strategy” to ensure timely delivery of vaccine doses, European Commission spokesman Stefan De Keersmaecker told reporters in Brussels. “We want to make sure that there’s a speedy delivery of a sufficient number of doses the European citizens are entitled to and which have been promised on the basis of this contract.”
Astra delivered just a quarter of the coronavirus vaccine doses that the EU was expecting in the first quarter, while it has revised downward its projections for shipments in this quarter. The drugmaker does not sell its shot for profit, but the prospect of a long legal battle with 27 governments raises the risk of litigation costs and damage payments.
“AstraZeneca has fully complied with the advance purchase agreement with the European Commission and will strongly defend itself in court,” the drugmaker said in a statement. “We believe any litigation is without merit and we welcome this opportunity to resolve this dispute as soon as possible.”
Astra’s shares fell briefly on the news before paring losses. The stock was little changed at 1:50 p.m. in London.
In addition to the dispute over deliveries, Astra’s vaccine has been mired in controversy in Europe over alleged clotting side effects, which have led some EU members to limit its use to specific age groups. The European Medicines Agency said last week that while benefits of the shot outweigh the risks, the balance strongly depends on both age and how much virus is circulating in the population.
In its statement on Monday, Astra said it is about to deliver almost 50 million doses to European countries by the end of April, in line with its forecast. The EU has said these deliveries are lower than what was agreed in the company’s contract, and has vowed to block any export requests from Astra’s facilities in Europe until the drugmaker fulfills its commitments.
“Some terms of the contract have not been respected,” De Keersmaecker told reporters in Brussels.