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(Bloomberg) -- US health officials are reevaluating a $590 million contract for bird flu shots that the Biden administration awarded to Moderna Inc., people familiar with the matter said.
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The review is part of a government push to examine spending on messenger RNA-based vaccines, the technology that powered Moderna’s Covid vaccine. The bird flu shot contract was awarded to Moderna in the Biden administration’s final days, sending the company’s stock up 13% in the two days following the Jan. 17 announcement.
The US is in the midst of a record-breaking bird flu outbreak that’s affected dozens of cattle herds along with poultry flocks nationwide, sending egg prices soaring. While human cases have been relatively rare, the virus has caused deaths in the past, and experts are concerned that it could become more transmissible and dangerous.
“While it is crucial that the US Department and Health and Human Services support pandemic preparedness, four years of the Biden administration’s failed oversight have made it necessary to review agreements for vaccine production,” a spokesperson for HHS said in a written statement.
Shares of Moderna fell as much as 6.6% in trading after US markets closed Wednesday. The company didn’t immediately respond to a request for comment.
Moderna said in January it was gearing up for a big final-stage trial of its vaccine, after successfully completing an early-stage trial last year. Without funding, that big trial may not happen.
Messenger RNA technology was the foundation of Covid vaccines from both Moderna and Pfizer Inc., which worked with partner BioNTech SE on its pandemic shots. The technology allows vaccines to be designed and made more quickly than traditional approaches.
The government also told Vaxart Inc. to stop much of the work on a federal contract for research on a new oral Covid vaccine, according to regulatory filings. The contract provided up to $453 million, according to government records.
Moderna has been under pressure to find new sources of revenue as its Covid vaccine sales fall sharply and it spends heavily on its pipeline. The contract was pushed through with some urgency, the people said, because of concerns that the Trump administration would be less willing to fund vaccine makers.