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Moderna MRNA recently announced that the U.S. government has terminated the previously-awarded contract for the late-stage development of an mRNA-based bird flu vaccine, as well as the right to purchase this vaccine.
The Biden administration had awarded two contracts to Moderna over the past year. This includes $590 million in funding earlier this year to advance vaccine development, including the expansion of clinical studies for up to five additional pandemic influenza subtypes. Another contract worth $176 million was awarded to the company last year to expedite vaccine development.
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This announcement did not come as a surprise since the Trump administration had previously announced that it was reviewing the agreements made during the Biden era for vaccine production.
Despite the funding setback, Moderna shared encouraging interim data from a phase I/II study on mRNA-1018, its experimental vaccine targeting H5 and H7 avian influenza viruses. Among the 300 adult participants, only 2.1% initially showed protective levels of antibodies. However, that figure surged to 97.8% three weeks after participants received the second of two doses. Per the company, the vaccine demonstrated a favorable safety profile, with no significant tolerability issues reported.
Moderna plans to present additional clinical findings at an upcoming scientific conference. Although the vaccine was previously expected to progress to late-stage development with support from the U.S. government’s funding, the company now intends to explore new paths forward in line with its broader pandemic preparedness goals.
MRNA Stock Price Performance
Year to date, Moderna’s shares have plummeted 37% compared with the industry’s 5% decline.
Image Source: Zacks Investment Research
Recent Development With MRNA’s Stock
There is currently a negative sentiment around Moderna's stock, driven by a series of recent developments. Earlier this month, the FDA released updated guidance on COVID-19 vaccines, restricting booster eligibility for healthy individuals under 65 years — a move that could further reduce demand.
Adding to the uncertainty, Moderna voluntarily withdrew a regulatory filing with the FDA seeking approval for its COVID-19/influenza vaccine, after the agency requested additional efficacy data for the flu component. This setback derailed the company’s initial plans to secure a potential approval for the vaccine before this year’s end.
This funding setback also comes at a time when Moderna is actively working to scale back its operating expenses and streamline its R&D pipeline.