AstraZeneca Plc AZN is reportedly reconsidering its planned $578.4 million (450 million pounds) investment in a new vaccine-manufacturing site, a departure from CEO Pascal Soriot‘s previous statement that the company was “absolutely ready to go.”
What Happened: The UK Treasury, under the direction of Rachel Reeves, is reportedly looking to decrease government support to AstraZeneca by over 20 million pounds.
As a result, AstraZeneca might relocate the project from Speke in Merseyside, UK to France.
The original offer, reportedly made by former Chancellor Jeremy Hunt, promised at least 65 million pounds to support the development of the facility. The current offer has allegedly been reduced to around 40 million pounds following a review of past decisions by the Treasury.
Why It Matters: The Financial Times reported that relocating the project could be risky. And the proposed reduction in financial support has led to fears that the gap between AstraZeneca’s expectations and the government’s offer could jeopardize the investment.
AstraZeneca established its vaccines unit after collaborating with the University of Oxford to develop a COVID-19 vaccine.
Although the company withdrew from that project due to declining demand, it remains committed to expanding its vaccine manufacturing capabilities.
The existing Speke site, currently used for producing the nasal flu vaccine FluMist, is set to be upgraded under the new investment to research, develop, and manufacture new vaccines with a focus on sustainable practices.
Price Action: AZN stock is down 0.34% at $83.09 at last check Wednesday.
Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
Read Next:
Image: Shutterstock
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
Comments
Trade confidently with insights and alerts from analyst ratings, free reports and breaking news that affects the stocks you care about.
