AstraZeneca PLC (LSE:AZN) shares fell slightly on Monday after reports that it had shelved a £450 million vaccine manufacturing plant extension in northwest England, turning down £80 million of government support.
In co-announced plans last year, the FTSE 100's largest company said it would plough £650 million into a facility in Liverpool alongside the expansion of an existing site in Cambridge, dependent on a "mutual agreement" with HM Treasury and other parties.
But this weekend the Anglo-Swedish drug giant called off the Merseyside investment, citing various factors, including "the timing and reduction of the final offer compared to the previous government's proposal".
Explaining why the size of the government grant had been reduced, the Treasury said it was because of a change to the "make-up of the investment".
A Treasury spokesperson said: "All government grant funding has to demonstrate value for the taxpayer and unfortunately, despite extensive work from government officials, it has not been possible to achieve a solution."
The Financial Times reported today that AstraZeneca rejected close to £80 million of state support for the cancelled Speke factory extension.
It was said that the company raised the NHS's rejection of its new breast cancer drug and the drug pricing mechanism during negotiations.
AZN shares fell 1% to 11,260p in early trading on Monday, though these losses were soon cut in half.