Vaccine Delivery Delays Weigh on Europe
This week we talk about a vaccine delivery dispute and Aramco’s new stake sale.
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The European Union is suing AstraZeneca, the manufacturer of one of the Covid-19 vaccines being administered in Europe, for failing to deliver on its promises.
The European Commission, the EU’s executive arm, said it filed a lawsuit, backed by all 27 member states, against the British-Swedish drugmaker on Friday for not respecting the vaccine-supply contract.
This marks an escalation in the dispute between the two sides over supplies of the lifesaving shot. The lawsuit is also a sign of how desperate governments are to secure doses as they begin to ease restrictions. AstraZeneca said it regrets the commission’s decision and looks forward to working with it to “vaccinate as many people as possible.”
The EU had initially planned to focus on AstraZeneca’s vaccine for its rollout as it is less expensive and easier to transport than the vaccines produced by Pfizer and Germany’s BioNTech, and by Moderna, both of which are already being used in Europe.
Earlier this year, the drugmaker said it would not be able to provide the up to 400 doses it was contracted to deliver by June. In the first quarter, the bloc received about 30 million of the 120 million doses agreed on for the period.
One of the reasons for the delay seems to be a production problem at a factory in Belgium. The Wall Street Journal reported in January that lower output of raw vaccine substance had been spotted at a Belgian plant in December. Equities analysts also said AstraZeneca has relatively little experience in vaccines and didn’t anticipate how resource-intensive the process of making the shot was going to be.
Meanwhile, the White House plans to share its entire supply of the vaccine with the rest of the world, including developing countries that are behind wealthy nations in immunizing people against the disease. The shot AstraZeneca developed with the University of Oxford hasn’t been authorized for use in the U.S.
Another thing I’m watching is the world’s most valuable oil company, Saudi Arabian Oil Co. Known as Aramco, the state-controlled company is in talks to sell more stakes.
In the past, owning part of the oil company was so strategic that investors had difficulty buying even a minority stake. Now the Saudi monarchy wants to draw more foreign investment since Aramco’s initial public offering in December 2019, which valued the company at around $1.7 trillion.
A lot has changed for Aramco. Many big foreign investors have shunned the company since its valuation was too pricey and there are governance concerns. Aramco’s shares have recovered somewhat to levels the company held shortly after its IPO. (See the chart below.)
Oil companies in general have had a bumpy road during the pandemic and face potentially tougher environmental regulations in the U.S. and Europe. We’ll watch how oil plays out as we emerge from the worst of the coronavirus.
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Elevate the Conversation is produced by the editorial teams of The Wall Street Journal and Dow Jones Newswires. Here's a little bit more about us, along with our contact information. We'd love to hear from you.
Dieter Holger, Reporter: I have a knack for uncovering values-based investing trends and I’m obsessed with spreadsheets and charts. I really enjoy ‘80s music and skateboarding (but I suck). dieter.holger@wsj.com @dieterholger
Maitane Sardon, Reporter: I have a passion for amplifying the voices of those at the center of stories. I love running on Barcelona’s beaches and binging on chocolate ice-cream to compensate (it’s all about balance). maitane.sardon@wsj.com @sardonmaitane
Catherine Lindsay, Editor: I like breaking down complex ideas and explaining them. On the weekend, you’ll find me wandering the city with my film camera at the ready. catherine.lindsay@wsj.com @CathsLindsay
Tammy Lian, Designer: As a visual producer, I'm always excited by the challenge of creative problem solving. In my spare time, you can usually find me taking care of my ever-growing collection of plants and drinking tea. tammy.lian@wsj.com @violian.tammy