American pharmaceutical company Novavax has published its vaccine agreement with Canada for 52 million doses of its COVID-19 vaccine. The company expects to eventually produce some of the vaccine in Canada.
The Trudeau government has said it inked a Novavax deal last August, but would not specify whether that was merely a tentative agreement, or an actual contract. The newly released contract, filed with the U.S. Securities and Exchange Commission, reveals the final deal was signed on Jan. 19.
Novavax has submitted the paperwork for its vaccine candidate to Health Canada, but it has not yet been approved.
This is the only agreement made public so far between the Canadian government and a COVID-19 vaccine manufacturer. To date, Ottawa has been resistant to releasing any details about its vaccine contracts, citing commercial confidentiality. The Novavax agreement specifically permits releasing some details of the contract “for the purposes of government administration,” in keeping with pro-active disclosure laws, and “reporting to Parliament.” It’s unclear if Canada’s contracts with other vaccine manufacturers contain similar clauses.
Commercially sensitive details, including the price per dose and exact delivery schedule, are redacted or not included. The U.S. government is paying Novavax about US$16 a dose.
Novavax will be delivering vaccines produced abroad, if or when its vaccine candidate is approved, but it hopes to eventually manufacture those doses at a National Research Council facility in Montreal.
In February, Novavax and Ottawa signed a memorandum of understanding to mass produce doses at the NRC’s still-under-construction Royalmount facility, which the government scientific body hopes to open later in 2021.
Novavax’s financial disclosures say the company has a “broader intention for the Government of Canada and us to work together to increase our Canadian presence.” That includes plans to “expand vaccine production in Canada.”
Last month, Novavax’s chief commercial officer, John Trizzino, told The Globe and Mail that “the idea was to provide for what will likely be the ongoing need for a vaccine for the foreseeable future.”
Novavax will keep control of the intellectual property involved in the vaccine, and will be shielded from legal liability in the event any of the vaccines are defective – clauses that are common in international COVID-19 vaccine agreements.
The contract gives Canada the option of procuring an additional 24 million doses, for a total of 76 million.
The agreement reads that Novavax intends to deliver monthly shipments of vaccines, but that the delivery schedule may change for a variety of reasons. “Novavax will use commercially reasonable efforts to deliver the product to customer in accordance with the delivery schedule,” the contract reads. The agreement with Britain uses the same language.
That language differs from an agreement signed between AstraZeneca and the European Union – the only other contract that has thus far been released to this level of detail. That deal says the company will make “best reasonable efforts” to meet the delivery timeline.
Clint Hermes, counsel at U.S. law firm Bass, Berry & Sims, said those two standards have important differences.
“Simplistically, ‘best efforts’ means that you have to do anything in your power to accomplish something that isn’t truly silly, and in the context of a company, would mean anything short of bankruptcy,” he told The Globe. “On the other hand, ‘commercially reasonable’ just means that you have to make some conscious effort to accomplish something, but if a step wouldn’t make economic sense for you to take, you weren’t obligated to take it.”
The difference depends greatly on the jurisdiction, Mr. Hermes said, and is often subject to litigation. While the AstraZeneca contract lays out what constitutes “best reasonable efforts” – essentially comparing it to a similar company, in a similar situation – the definition is redacted in the Novavax agreement.
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