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Dec 10, 2020

Moderna offers U.S. fail-safe on vaccines if Pfizer falls short

There’s no reason to wait to get the COVID-19 vaccine: Infectious diseases specialist


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Moderna Inc. could offer a fail-safe option that will allow the U.S. to get enough COVID-19 shots to inoculate most Americans if the government can’t reach an agreement to quickly buy more vaccine from Pfizer Inc., which plans to honour its contracts with other countries.

Existing U.S. deals with Pfizer and Moderna for 100 million doses of each company’s vaccine are only enough to inoculate a maximum of 100 million people combined. But earlier this year, Moderna said the U.S. has the option to buy 400 million more doses at a fixed price of US$16.50 per shot.

It’s an agreement that could turn out to be especially valuable if the White House is forced to wait for Pfizer to replenish its inventory. No haggling is required to get Moderna’s added doses; all the U.S. has to do is opt in for the bigger number after the vaccine is cleared by U.S. regulators, according to a securities filing.

“The U.S. Supply Agreement provides the U.S. Government with four additional and separate options to purchase 100 million doses per option of mRNA-1273,” Moderna said in the filing earlier this year. “Each option is exercisable at the sole discretion of the U.S. Government,” at various times during the first half of 2021.

The vaccine produced by Pfizer and German partner BioNTech SE is in the final stages of getting emergency authorization from the U.S. Food and Drug Administration, with an advisory panel to the agency meeting today. Moderna’s shot is expected to go before the same panel on Dec. 17th.

Moderna has said it expects to produce 500 million to 1 billion total doses of its vaccine in 2021. If it reaches the higher end of that range, Moderna could meet most of the U.S. demand for a coronavirus vaccine, Morgan Stanley analyst Matthew Harrison said in a note to clients on Dec. 8.

The U.S. could start delivering additional doses from Moderna as soon as the beginning of the second quarter, company spokesman Ray Jordan said. The exact agreed-upon delivery dates for the added doses haven’t been disclosed. But Moderna expects to have capacity at its multiple plants to make the additional 400 million doses, Jordan said.

While Jordan declined to comment on any talks that might be ongoing now with the U.S., it could be advantageous for Moderna to find out sooner rather than later how many more doses the U.S. wants. If the U.S. doesn’t lock in the full 400 million extra doses, it could free up capacity for Moderna to sell more supply to other countries, potentially at a higher price.

Besides the U.S., the company has already notched deals to supply its vaccine to the European Union, Japan, Canada, the U.K., Israel, Switzerland and Qatar.

Moderna is currently making U.S. supply at its plant in Massachusetts and another factory in New Hampshire owned by manufacturing partner Lonza Group AG. Lonza Group is producing supply for other countries at a plant in Switzerland.

Plant Capacity

Lonza has capacity to produce 300 million doses a year from three production lines in Visp, Switzerland, and 100 million doses in New Hampshire. Moderna itself has one production line in Massachusetts with capacity for 100 million doses a year, Lonza’s chairman said in an interview earlier this fall.

On Tuesday, a Pfizer board member said that the U.S. government been offered 100 million more doses that could be delivered in the spring, but declined. The board member, Scott Gottlieb, said the company made multiple offers, as recently as about a month ago when the company said it had shown the shot was highly effective. But the Trump administration declined.

U.S. officials have disputed that version of events, and suggested the drug giant declined to provide a concrete timeline for when when it could deliver additional supply. Negotiations are ongoing, U.S. officials have said.