Moderna stock falls amid review of bird flu vaccine funds

Published 27/02/2025, 13:52
© Reuters.

Investing.com -- Moderna (NASDAQ:MRNA) shares dropped 4.5% following reports that the Trump administration is considering withdrawing funding for the company’s bird flu vaccine. Bloomberg disclosed that U.S. health officials are reassessing a $590 million contract that was awarded to Moderna in the final days of the Biden administration, which had initially boosted the company’s stock.

The review is part of a broader examination of expenditures on mRNA-based vaccines, the same technology that underpinned Moderna’s COVID-19 vaccine success. The potential retraction of funds comes during an unprecedented bird flu outbreak in the U.S., which has significantly impacted poultry flocks and cattle herds, leading to a surge in egg prices. Although human cases have been scarce, there is concern over the virus becoming more transmissible and lethal.

An HHS spokesperson stated, "While it is crucial that the US Department and Health and Human Services support pandemic preparedness, four years of the Biden administration’s failed oversight have made it necessary to review agreements for vaccine production." This scrutiny casts doubt on the future of Moderna’s large-scale vaccine trial, which was planned after an early-stage trial last year.

Moderna’s reliance on its COVID vaccine for revenue has become a vulnerability as sales decline and the company invests heavily in its product pipeline. The bird flu vaccine contract was expedited due to concerns that the Trump administration might not be as supportive of vaccine manufacturers.

The government’s reassessment also extends to Vaxart (NASDAQ:VXRT) Inc., which has been instructed to halt much of its federally contracted research on a novel oral COVID vaccine. This contract was worth up to $453 million.

Moderna did not immediately respond to requests for comment on the review of the funding. The news has added to investor apprehension, as the company searches for new revenue streams in a post-pandemic market.

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