The canceled contract comes as Moderna nears a critical FDA decision for its next-generation COVID-19 vaccine.
The Department of Health and Human Services has terminated a contract previously awarded to Moderna for the development of a bird flu vaccine, the company announced on Wednesday.
Moderna won the contract, funded by the Biomedical Advanced Research and Development Authority, in July 2024, giving it $176 million for the late-stage development of an mRNA vaccine against the H5 influenza virus. In January this year, HHS added $590 million to the pot, yielding a total contract value of approximately $766 million. The agreement also allowed for up to five additional subtypes of pandemic influenza. A newer strain of the H5 virus has hit wild and domesticated flocks hard and spilled over to cows and in a few cases, humans, fueling concerns that it could acquire the ability to transmit between people.
Moderna CEO Stéphane Bancel said on Wednesday that the pulled funding “adds uncertainty” to the company’s bird flu program. It also comes at a critical juncture for Moderna, which is awaiting an FDA decision date for its next-generation COVID-19 shot mRNA-1283 at the end of this week and has been struggling to weather broader macro headwinds.
Recent moves from the Trump administration to hamstring mRNA vaccine research have raised concern across the scientific community. In Moderna’s case, despite data showing that its flu/COVID-19 vaccine outperformed current shots, the company elected to pull its regulatory application for the combo vaccine last week after consulting with the FDA.
The company at the time did not reveal the specific reason for withdrawing the application, only noting that it plans to resubmit “later this year,” when more efficacy data for a different flu vaccine become available. The combo vaccine, dubbed mRNA-1083, contains components of the H5 flu vaccine, as well as mRNA-1283, the COVID-19 vaccine under review.
There have been other signals of a shifting stance toward vaccines, which have likewise had wider implications on the industry. In April, for instance, the FDA missed its target decision date for Novavax’s COVID-19 vaccine. The approval finally came on May 16—some six weeks after the target date—and carried notable restrictions on its use.
Even before these vaccine headwinds, Moderna’s business was struggling. In 2024, Moderna’s sales crashed to $3.2 billion from $6.8 billion in 2023, the company revealed in its full-year financial report. Moderna was also deep in the red in Q4 2024, with $1.1 billion in losses versus $217 million in profits during the same period the previous year.
