* Court blocks public investment in local biotech firm
* Italy's plan to produce own COVID vaccine at risk
* Government to decide next step in coming weeks - source
ROME, May 14 (Reuters) - Italy's hopes of producing its own
COVID-19 vaccine have been thrown into doubt after the state
audit court rejected a plan to pump public funds into local
biotech company ReiThera, two sources close to the matter told
Reuters on Friday.
A source at the audit court said it had ruled this week
against a contract drawn up by state agency Invitalia to invest
some 50 million euros ($60.62 million) as part of a deal with
ReiThera to support its development of the new vaccine.
"The investment scheme is illegitimate, and therefore void,"
the source said, without providing any details.
The court normally adjudicates on whether state agencies
have followed correct procedures and not on the merits of a
The company's vaccine has concluded stage-2 trials and the
firm is in early talks with Brussels to supply the European
Union. However, it needs public funding to start stage-3 trials.
Invitalia didn't immediately reply to a Reuters request for
comment. The state audit court declined to comment on the case.
Stefano Colloca, a senior director at ReiThera, said he had
not heard from the court.
"We're waiting to hear the official news, to find out if
it's true and why this decision was made, which, as far
as we know, would be unprecedented," he told Reuters.
A source from the industry ministry, which had signed the
investment contract along with Invitalia and ReiThera, confirmed
the audit court ruling and said a decision on what to do would
be made in the coming weeks.
Prime Minister Mario Draghi's government, which inherited
the project from the previous administration led by Giuseppe
Conte, could either decide to re-write the contract in an effort
to overcome the court objections or else drop the plan.
Alternatively, it could plow ahead regardless, but such a
move in defiance of the court would be highly unusual.
ReiThera - whose aim is to produce some 100 million shots of
a single-dose vaccine at a production site close to Rome this
year - has been developing the project in partnership with
Germany's Leukocare and Belgium's Univercells.
After encouraging results from phase 1 trials, the previous
government decided to invest in the company to give Italy some
independence in vaccine procurement, which at the moment relies
entirely on a joint EU initiative.
The ReiThera vaccine is based on a so-called non-replicating
adenoviral vector, the same technology that AstraZeneca
and Johnson & Johnson have used in their shots.
Vaccinations for both those brands are recommended only for
people aged 60 and above in Italy, after it and other European
countries briefly halted AstraZeneca inoculations in March due
to very rare cases of blood clots.
J&J supplies were also temporarily frozen due to similar
($1 = 0.8249 euros)
(Additional reporting by Emilio Parodi; Writing by Angelo
Amante; Editing by Crispian Balmer and Gareth Jones)