The Department of Health and Human Services will cancel 22 vaccine development projects totaling $500 million, marking a major policy shift under Secretary Robert F. Kennedy Jr. that directly affects pharmaceutical giants like Pfizer Inc. (NYSE:PFE) and Moderna Inc. (NASDAQ:MRNA).
Pivot To ‘Whole Virus Vaccines, Novel Platforms’
In a statement on Tuesday, Kennedy announced the termination of mRNA-based vaccine contracts aimed at combating respiratory viruses such as COVID-19, the flu, and H5N1, according to AP.
Kennedy, who has long expressed skepticism about mRNA vaccines, marked a major shift in federal vaccine strategy with this move.
“To replace the troubled mRNA programs, we're prioritizing the development of safer, broader vaccine strategies, like whole-virus vaccines and novel platforms that don't collapse when viruses mutate,” he said in a video, following the announcement.
Work On ‘A Universal Vaccine’ And ‘Natural Immunity’
Later, during a news conference in Alaska, Kennedy said that there was work underway on a new approach to vaccinations, which would be “a universal vaccine” that he says would mimic “natural immunity.”
“It could be effective… we believe it's going to be effective against not only coronaviruses, but also flu,” he said.
mRNA Flu Shots Now At Risk
Moderna, which was working on a combined mRNA shot for coronavirus and the flu, believed that the mRNA platform would allow it to ramp up production of shots compared to other traditional vaccines.
A month ago, Dr. Vinay Prasad, the U.S. Food and Drug Administration's (FDA) top vaccine official, limited the approval of the COVID-19 vaccine by Moderna and Novavax Inc. (NASDAQ:NVAX) to only those at higher risk, seniors and people with underlying health conditions, as opposed to a prior recommendation for everyone 12 and above.
Both shares of Moderna and Pfizer remain largely unfazed by the news, with the former flat and the latter up 0.16% pre-market, respectively. Moderna scores poorly in Benzinga’s Edge Stock Rankings, with an unfavorable price trend in the short, medium and long terms. Let’s see how it compares with Pfizer and the rest of its industry.
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