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

The U.S. Department of Health and Human Services (HHS) has abruptly terminated a $590 million contract with Moderna for the late-stage development of a pandemic bird flu vaccine, leaving the biotech company scrambling to find alternative funding sources. This unexpected move comes amid political changes and raises questions about the future of mRNA-based influenza vaccines.

Contract Termination and Its Implications

The HHS decision to axe the contract, which was awarded in January 2025, has significant implications for Moderna's pandemic preparedness efforts. The agreement was intended to fund late-phase development and secure the right to purchase pre-pandemic influenza vaccines. With this funding now off the table, Moderna faces challenges in advancing its mRNA-1018 vaccine candidate through final clinical stages.

This termination follows a period of uncertainty that began three months ago when the HHS announced a reevaluation of its contract with Moderna. The review coincided with the appointment of Robert F. Kennedy, Jr. as the new head of the department, who has been openly critical of mRNA vaccines in the past.

mRNA-1018: Promising Phase 1/2 Results

Despite the setback in funding, Moderna has released encouraging data from its phase 1/2 trial of mRNA-1018. The vaccine candidate, which encodes for hemagglutinin glycoproteins, demonstrated impressive efficacy:

• At baseline, only 2.1% of the 300 adult participants had protective antibody levels.
• Three weeks after the second dose, 97.8% of participants achieved antibody titers above the threshold of protection.

The vaccine was generally well-tolerated, with most adverse reactions classified as mild (grade 1 or 2). Moderna plans to present more detailed clinical data at an upcoming scientific meeting.

Financial Challenges and Strategic Shifts

The loss of the HHS contract comes at a challenging time for Moderna. The company has recently implemented cost-cutting measures, including:

• A 19% reduction in R&D spending in the first quarter of 2025.
• Plans to cut operating expenses by up to $1.7 billion.

Moderna remains committed to its "strategic commitment to pandemic preparedness" and is actively seeking alternatives to fund the late-phase development of mRNA-1018. However, the path forward for this promising vaccine candidate remains uncertain without government backing.

As the pharmaceutical industry watches closely, the termination of this contract may have broader implications for the development of mRNA-based vaccines and the U.S. government's approach to pandemic preparedness in the coming years.