By Francesco Guarascio
BRUSSELS (Reuters) -European Union lawyers on Wednesday demanded AstraZeneca (NASDAQ:AZN) immediately deliver COVID-19 vaccines from its factories in Britain, in a move that risks reigniting a spat with London over scarce vaccine supplies.
The call came in the opening hearing of the European Commission's legal case in Brussels against the Anglo-Swedish drugmaker over supply delays.
AstraZeneca has missed delivery targets to both Britain and the EU, delaying the bloc's immunisation campaign in particular, and stoking tensions between London and Brussels.
The bloc accuses the company of failing to meet its contractual obligations, whereas AstraZeneca says it is complying with the agreement, which it considers not fully binding.
"We demand deliveries by the end of June and we also demand with immediate effect the use of all plants listed in the contract," EU lawyer Rafael Jafferali told the judge in a hearing room packed with journalists.
"The contract listed a series of plants that had to be used by AstraZeneca and that still today, in breach of the contract, AstraZeneca is not using," the lawyer said.
AstraZeneca lawyer Hakim Boularbah retorted: "There is no obligation to use the factories."
The contract lists four vaccine-making plants, with two of them Britain. Whereas AstraZeneca has delivered doses to the EU from sites in Belgium and the Netherlands, it has not shipped to EU countries any dose produced in UK plants run by Oxford Biomedica and Cobra Biologics.
The contract also says that a Catalent (NYSE:CTLT) factory in the United States which manufactures AstraZeneca jabs "may serve as a back-up supply site".
EU officials have told Reuters that AstraZeneca justifies the lack of supplies from Britain by citing clauses in its UK contracts that prevent exports of the vaccine it developed with Oxford University.
The UK government has denied export curbs and is seeking extra doses from a factory in the Netherlands run by AstraZeneca's sub-contractor Halix. The EU is now blocking exports from that plant.
The U.S. government has told Brussels it will not export doses to Europe until its vaccine rollout is completed.
UNDER-DELIVERING
With the pandemic still raging across the continent, the AstraZeneca vaccine was seen as a central part of Europe's immunisation campaign and a way to send coronavirus shots to poorer countries because of its simple storage requirements.
But cuts and delays in deliveries have disrupted the inoculation campaign in the EU, which trails behind Britain, the United States and Israel on vaccinations.
By the end of March, AstraZeneca had delivered only a quarter of what it had committed to the EU. The company has said it plans to ship a total of 100 million doses to the bloc by the end of June, instead of 300 million foreseen in the contract.
Under Britain's 100-million-dose contract, AstraZeneca was supposed to have delivered 30 million by September 2020, but it had only supplied about five million by the end of last year. One million doses came from EU factories, officials have said.
AstraZeneca has blamed production problems for the delays.
In court, the first session ended in just over an hour and the parties agreed to hold two hearings on May 26. The EU lawyers asked for a decision before the end of June to make sure missing doses could be delivered in a timely fashion.
An EU official told Reuters earlier this week the EU could settle for 130 million doses by the end of June.
If no other hearing is necessary, a decision could be made in the weeks following the May 26 hearings.
"AstraZeneca deeply regrets the decision of the European Commission to start this legal action," company lawyer Hakim Boularbah told journalists after the hearing. "We hope to resolve this dispute as soon as possible."