AstraZeneca PLC (LON:AZN) may face a legal challenge over COVID-19 vaccine deliveries as the European Commission is preparing proceedings.
"EU states have to decide if they (will) participate. It is about fulfilment of deliveries by the end of the second quarter,” an EU official told Reuters.
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Most countries are in favour of suing the company, Politico reported.
“AstraZeneca is not aware of any legal proceedings and continues to hold regular discussions on supply with the Commission and Member States," a spokesperson for the firm told Proactive.
The FTSE 100 pharma giant has been criticised by the bloc after cutting supplies below the levels indicated by initial contracts.
Earlier this year, it admitted it would supply 30mln doses to the EU instead of the promised 80mln in the first quarter of 2020, and only 70mln instead of the agreed 180mln in the following three months because of supply issues.
Unlike the UK and the US, the EU didn’t negotiate a ‘Europe first’ clause on its purchasing agreements, so jabs produced on its territory could be exported abroad.
According to analysts at IG, AstraZeneca is already "very unpopular" in the EU so the legal challenge may not make much difference there, while "it appears to have a good defence worked out already that will help maintain its image in other places such as the UK".
"Clearly however it will not want to risk antagonising EU governments too much given the importance of the EU for revenues," Chris Beauchamp, Chief Market Analyst at IG, told Proactive.
"One of the largest economies on the planet (taken as an EU whole) with high levels of wealth and healthcare spending, the EU will be a vital part of AZN’s business, so it does need to tread very carefully."
Shares rose 1% to 7,675p on Thursday morning.
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