The U.S. government has canceled more than $700 million in funding previously awarded to Moderna for the development of its bird flu vaccine, the company announced Wednesday.
The decision, made by the Department of Health and Human Services (HHS), halts late-stage development of Moderna’s mRNA-based vaccine targeting the H5N1 avian influenza virus and removes the government’s right to purchase future doses.
Moderna shares remained flat in after-hours trading following the announcement.
Earlier this year, the Biden administration had awarded Moderna $590 million to support clinical studies of its bird flu vaccine and expand research into up to five additional influenza subtypes. This came on top of $176 million provided in 2023 for late-stage development of the vaccine.
However, HHS said it decided to terminate the agreement after an internal review concluded the project did not meet the agency’s scientific or safety standards for continued federal investment.
Public health experts criticized the move. Dr. Amesh Adalja, a senior scholar at the Johns Hopkins Center for Health Security, warned the cancellation could eliminate one of the most promising tools to respond quickly to a potential avian influenza outbreak. “This is the opposite of what the government did with Operation Warp Speed during COVID-19,” Adalja said.
Bird flu has spread widely over the past year, infecting at least 70 people—most of them farm workers—and sweeping through cattle herds and poultry farms.
Health and Human Services Secretary Robert F. Kennedy Jr., a longtime vaccine skeptic, has publicly questioned the need for bird flu vaccination. Earlier this year, he faced criticism from lawmakers after suggesting in a television interview that poultry farmers should allow the virus to spread naturally to study birds that resist infection.
Despite the cancellation, Moderna said it remains committed to the vaccine and will seek alternative funding and partners for late-stage development and manufacturing. The company is relying on new mRNA vaccines—including its bird flu shot and a combination COVID-flu vaccine—to offset declining demand for its COVID-19 vaccine.
On Wednesday, Moderna also reported positive interim results from a mid-stage clinical trial showing that its bird flu vaccine is safe and produces a strong immune response against the H5 virus subtype.
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