(Reuters) -The Trump administration has canceled a contract awarded to Moderna for the late-stage development of its bird flu vaccine for humans, as well as the right to purchase shots, the drugmaker announced on Wednesday.
Shares of Moderna were flat in after-market trading.
Moderna in January was awarded $590 million by the Biden administration to advance the development of its bird flu vaccine, and support the expansion of clinical studies for up to five additional subtypes of pandemic influenza
This was in addition to $176 million awarded by the U.S. Department of Health and Human Services (HHS) last year to complete the late-stage development and testing of a pre-pandemic mRNA-based vaccine against the H5N1 avian influenza.
HHS told Reuters earlier this year that it was reviewing agreements made by the Biden administration for vaccine production.
"The cancellation means that the government is discarding what could be one of the most effective and rapid tools to combat an avian influenza outbreak," said Amesh Adalja, senior scholar at the Johns Hopkins Center for Health Security, adding that it is the opposite approach Trump took with Operation Warp Speed to combat COVID-19.
An HHS spokesperson said that after a comprehensive internal review, the agency had determined that the project did not meet the scientific standards or safety expectations required for continued federal investment.
Bird flu has infected 70 people, most of them farm workers, over the past year as it has spread aggressively among cattle herds and poultry flocks.
Health Secretary Robert F. Kennedy Jr. has questioned the use of vaccines and earlier this year drew censure from some in the U.S. Congress after he suggested in a television interview that poultry farmers should let the bird flu spread unchecked through their flocks to study chickens who did not contract it.
Moderna said it plans to explore alternatives for late-stage development and manufacturing of the vaccine.
The company has been banking on revenue from newer mRNA shots, including its bird flu vaccine and experimental COVID-flu combination vaccine, to make up for waning post-pandemic demand for its COVID vaccine.
Moderna also said on Wednesday that it had received positive interim data from a mid-stage trial set up to test the safety and immunogenicity of its bird flu vaccine targeting the H5 avian influenza virus subtype.
(Reporting by Patrick Wingrove; Editing by Sandra Maler)
