HHS Terminates Moderna's $590M Bird Flu Vaccine Contract, Impacting Late-Phase Development

The Department of Health and Human Services (HHS) has terminated a $590 million contract with Moderna for the late-stage development of a pandemic bird flu vaccine, raising questions about the future of the biotech's influenza program. This decision comes amid leadership changes at HHS and ongoing debates surrounding mRNA vaccine technology.

Contract Termination and Its Implications

Moderna revealed on Wednesday, May 28, that the HHS has axed the award for late-stage development and the right to purchase pre-pandemic influenza vaccines. This contract, which was expanded in January to provide $590 million in funding, was intended to support the late-phase development of mRNA-1018, Moderna's mRNA vaccine candidate for pandemic bird flu.

The termination follows a period of reevaluation by the HHS, which began approximately three months ago under the new administration. This development leaves Moderna exploring alternatives for the late-phase development and manufacturing of its bird flu vaccine, potentially impacting the company's strategic commitment to pandemic preparedness.

Clinical Trial Results and Vaccine Performance

Despite the contract termination, Moderna shared promising data from its phase 1/2 trial of mRNA-1018. The study, involving 300 adults, demonstrated significant efficacy:

• At baseline, only 2.1% of participants had hemagglutination inhibition antibody titers above the threshold of protection.
• Three weeks after receiving the second dose, 97.8% of participants achieved antibody titers above the protective threshold.

The vaccine was generally well-tolerated, with no dose-limiting tolerability concerns reported. Most adverse reactions were mild, classified as grade 1 or 2, and did not significantly increase between the first and second doses. Moderna plans to present more detailed clinical data at an upcoming scientific meeting.

Financial and Strategic Implications for Moderna

The loss of this substantial funding comes at a challenging time for Moderna, as the company is actively working to reduce its expenses:

• In the first quarter, Moderna reduced its R&D spending by 19%.
• The company has outlined plans to cut its operating expenses by up to $1.7 billion.

With the termination of the HHS contract, Moderna must now seek alternative funding sources to continue the late-phase development of mRNA-1018, aligning with its strategic focus on pandemic preparedness. This situation underscores the volatile nature of government contracts in the pharmaceutical industry and the potential impact of political changes on ongoing research and development efforts.