The Blubber

The Trump administration has terminated a contract previously awarded to Moderna (MRNA.O) for the late-stage development of its human bird flu vaccine and the associated purchase rights, the company announced on Wednesday.

Moderna’s stock remained unchanged in after-hours trading.

Earlier this year, Moderna had secured a $590 million award from the Biden administration to advance its bird flu vaccine program and broaden clinical research to include up to five additional strains of pandemic influenza. This funding came on top of a $176 million grant received in the prior year from the U.S. Department of Health and Human Services (HHS), intended to support final-stage development and trials of a pre-pandemic mRNA vaccine for the H5N1 bird flu virus.

HHS previously told Reuters it was reviewing vaccine contracts made under the Biden administration.

“The cancellation effectively eliminates what may have been one of the most promising and rapid-response tools for countering a potential bird flu outbreak,” said Amesh Adalja, a senior scholar at the Johns Hopkins Center for Health Security. He noted that this move runs counter to the strategy adopted during Operation Warp Speed in response to COVID-19.

A spokesperson for HHS said the decision followed a thorough internal review and concluded the project failed to meet the agency’s scientific and safety criteria for ongoing federal support.

Over the past year, the bird flu virus has infected 70 people—primarily farm workers—amid widespread transmission among cattle and poultry.

Health Secretary Robert F. Kennedy Jr. has cast doubt on the effectiveness of vaccines and sparked controversy earlier this year after suggesting in a televised interview that poultry farmers should allow bird flu to spread naturally to study which chickens remain uninfected—a stance that drew criticism from some members of Congress.

Moderna said it is now evaluating alternative pathways to continue developing and manufacturing the vaccine.

The company is depending on revenue from new mRNA-based products—including its bird flu vaccine and a combined COVID-flu shot in development—to offset falling demand for its original COVID-19 vaccine in the post-pandemic market.

In a separate update, Moderna also reported promising interim results from a Phase 2 clinical trial evaluating the safety and immune response of its bird flu vaccine candidate targeting the H5 subtype of the avian influenza virus.