Gavi Terminates COVID Vaccine Deal with Clover, Demands $224M Repayment

International vaccine partnership Gavi has discontinued its COVID-19 vaccine advance purchase agreement with China's Clover Biopharmaceuticals, demanding repayment of $224 million. This development marks another setback in the global COVID-19 vaccine landscape and highlights the ongoing challenges faced by vaccine manufacturers in the post-pandemic era.

Gavi's Termination and Repayment Demand

Clover Biopharmaceuticals revealed in a regulatory filing that Gavi has sent notice terminating their vaccine deal and is demanding the return of a $224 million advance payment. The Shanghai-based company strongly contests this claim, stating it is "without merit based on the terms of the Advance Purchase Agreement" and vowing to "defend itself vigorously."

This situation bears similarities to Gavi's previous dispute with Novavax, which resulted in a settlement last year after the termination of another advance purchase agreement for COVID-19 vaccines.

Clover's Financial Challenges and Future Prospects

The demand for repayment comes at a challenging time for Clover Biopharmaceuticals. The company's most recent earnings release for the first half of 2024 reported negative revenue, with cash and cash equivalents declining from 1.8 billion Chinese yuan ($248 million) at the end of 2022 to 830 million Chinese yuan ($114 million).

With its COVID-19 vaccine efforts faltering, Clover is now focusing on its respiratory syncytial virus (RSV) vaccine candidate, SCB-1019. The company announced that the FDA has cleared its application to begin human clinical trials for this non-adjuvanted bivalent RSV vaccine. Clover has already enrolled the first participants in a phase 1 revaccination trial of the prefusion-stabilized F (PreF)-Trimer subunit shot, claiming that previous phase 1 results indicate SCB-1019 could be a potential best-in-class vaccine compared to GSK's Arexvy.

Historical Context and Industry Implications

The termination of Clover's agreement with Gavi is part of a broader trend of challenges faced by COVID-19 vaccine manufacturers. In June 2021, Clover and Gavi had signed a partnership agreement for the provision of up to 414 million doses of SCB-2019, Clover's protein-based COVID shot, through 2022. However, like Novavax, Clover struggled to meet regulatory targets in developing its vaccine.

This latest development underscores the rapidly changing landscape of the pharmaceutical industry, particularly in the realm of vaccine development and distribution. It also highlights the financial risks and complexities involved in global health partnerships, especially in response to public health emergencies.