Scottish Ministers in £20m talks to rescue Livingston vaccine production site

Up to £20m could be invested by the Scottish Government in a Livingston-based vaccine production site in a lifeline offer, it has emerged.

Valneva vaccines had been ordered by the UK Government before the order was cancelled.

Valneva, which is based in West Lothian, had paused its construction work at its manufacturing site after the UK Government cancelled an order for 100 million doses of its vaccine, due to be delivered in 2021 and 2022.

This led to widespread criticism including from the former chair of the UK Government’s vaccine taskforce, Dame Kate Bingham, who said Westminster may have acted “in bad faith” around the deal.

However, in a statement Valneva revealed it is in discussions with Scottish Enterprise – the Scottish Government’s business arm – for a multi-million grant worth between £10-20m.

The vaccine producer said the cash would allow it to “fully complete” its site in Livingston allowing it to be “fully developed as a key vaccine production site for the long term”.

Part of the deal includes up to 25,000 doses of the Valneva vaccine, free-of-charge, to the Scottish NHS, once it is approved by regulators.

The deal is yet to be finalised or pass due diligence requirements, but the company said it is also expected to include a commitment to future jobs in Livingston.

David Lawrence, the acting chief financial officer at Valneva, welcomed the potential grant deal and said the companies vaccine had recorded positive results in trials.

He said: “We’re pleased that we’ve been able to advance discussions with Scottish Enterprise quickly, following the UK Government’s unexpected decision to terminate our supply agreement with them.

"The grant will be very welcome and, subject to contract, will ensure that Livingston becomes a strategic vaccine manufacturing site for the future, successfully completing the work we began with HMG.”

Scotland’s business minister Ivan McKee added: “Valneva is a valued contributor to our life sciences sector and the Livingston facility is an important asset, developing vaccines for the treatment of several important infectious diseases and supporting high quality jobs.”

The company added it is in discussions with the UK Government in an attempt to reach an “amicable resolution” following the cancellation of the supply deal, but said it “continues to reserve all rights” if such an agreement is not achieved.

The warning comes after Dame Kate Bingham, who stepped down from her role leading the UK’s vaccine taskforce last year, said in November that the government may have “acted in bad faith” in the way it cancelled the deal with Valneva.

The decision was not only a blow to international pandemic efforts, but will dampen the UK’s resilience to future disease outbreaks, she said.

In a speech at Oxford University, Dame Kate said: “With cabinet support early on, the VTF had encouraged Valneva to upgrade and build a new manufacturing plant in Livingston, just outside Edinburgh.

“The result of the contract termination was that these plans were instantly put on hold, discussions for supply in the EU were paused and 100 plus new jobs immediately lost.

“But instead of an amicable wind down with a company that had massively extended itself to help during the pandemic crisis, the Government alleged a breach of contract, apparently as a means to avoid paying for the costs incurred up to that point – costs incurred at the request and for the convenience of the Government.

“Some might consider this behaviour as acting in bad faith.”

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