Moderna (NASDAQ: MRNA) announced Wednesday that the Trump administration has canceled a major contract for the late-stage development of its bird flu vaccine and the government’s right to purchase future doses. The move halts a key federal partnership aimed at preparing for a potential H5N1 avian influenza outbreak.
In January, the Biden administration had granted Moderna $590 million to accelerate development of its mRNA-based bird flu vaccine and expand clinical trials for other pandemic influenza strains. This followed an earlier $176 million award from the U.S. Department of Health and Human Services (HHS) to support late-stage development.
The HHS previously confirmed that it was reassessing vaccine production contracts made during the Biden administration. The abrupt cancellation has drawn criticism from public health experts. Amesh Adalja of Johns Hopkins Center for Health Security called it a “shortsighted decision,” contrasting it with the rapid vaccine development efforts under Trump’s Operation Warp Speed during COVID-19.
Bird flu has infected at least 70 people over the past year, mainly farm workers, amid its continued spread across U.S. poultry and cattle farms. Controversial comments by Health Secretary Robert F. Kennedy Jr., who suggested letting the disease spread naturally among poultry, further stirred public and political debate.
Despite the canceled contract, Moderna remains committed to advancing its bird flu program. The company reported positive interim results from a mid-stage trial testing the safety and immune response of its H5-targeted vaccine. Moderna aims to find new paths for late-stage development and production, especially as it looks to offset declining COVID vaccine sales by expanding its mRNA product lineup.
Shares of Moderna remained flat in after-hours trading following the announcement.