Moderna Drops Nearly 5% as Vaccine Contract Faces Review

According to Bloomberg, U.S. health officials are reevaluating a $590 million bird flu vaccine contract awarded to Moderna in the final days of the Biden administration. The review is part of a broader effort to assess government spending on messenger RNA-based vaccines—the technology behind Moderna's COVID vaccine. The contract announcement on January 17 triggered a 13% rally in Moderna's stock over the next two days. 

Moderna shares fell nearly 5% amid uncertainty over the deal's future.

The United States is currently grappling with a severe bird flu outbreak. The epidemic has led to the culling of millions of poultry, driving egg prices higher and further fueling inflation. In response, the U.S. Department of Agriculture has announced plans to import 70 million to 100 million eggs over the next one to two months.

Beyond its economic impact, bird flu also poses a serious public health risk. The virus can infect humans and, in severe cases, be fatal.

A spokesperson for the U.S. Department of Health and Human Services (HHS) commented, "While the department fully supports pandemic preparedness, the Biden administration's four years of failed oversight make it necessary to review vaccine production agreements."

Moderna Faces Major Revenue Risk

The potential loss of this contract could be a significant blow to Moderna. With COVID vaccine sales plummeting, the company is under mounting pressure to find new revenue sources while continuing to invest heavily in drug development.

Strained Relations Between Moderna and the U.S. Government

Moderna's relationship with U.S. government agencies has been tense. The company was previously involved in a patent dispute with the National Institutes of Health (NIH) over credit for its COVID vaccine. The government objected when Moderna listed only its own scientists as inventors on a patent application, rather than recognizing NIH researchers as co-developers.

The contract review adds further uncertainty to Moderna's outlook as it navigates government scrutiny and shifting priorities in pandemic preparedness.