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Moderna Stock Surges on $1.5 Billion Coronavirus Vaccine Deal with the U.S. Government

By Joe Tenebruso – Updated Aug 12, 2020 at 8:30AM

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The biotech could supply as many as 500 million doses to Americans.

The United States of America is building its arsenal for the battle against COVID-19.

The U.S. government has struck a blockbuster deal with Moderna (MRNA -0.55%) that will allow it to secure 100 million doses of the biotech company's experimental coronavirus vaccine, labeled mRNA-1273, for $1.525 billion, should it prove both safe and effective. The deal, announced Tuesday, will also give the U.S. the option to acquire an additional 400 million doses. 

A syringe is placed in a vaccine vial.

The U.S. is partnering with Moderna to ramp up its coronavirus defenses. Image source: Getty Images.

If the drug receives regulatory approval, Americans will be provided the vaccine free of charge, though healthcare professionals could assign a fee for administering it.

Combined with a prior research and development award of up to $955 million, the U.S. government has now invested as much as $2.48 billion in Moderna's vaccine platform. The investments are part of Operation Warp Speed, a national program designed to accelerate the creation and distribution of COVID-19 countermeasures. 

"For Operation Warp Speed, we are assembling a broad portfolio of vaccines to increase the odds that we will have at least one safe, effective vaccine as soon as the end of this year," Department of Health and Human Services Secretary Alex Azar said in a press release. "With this latest investment, we will have supported the vaccine candidate developed by Moderna in partnership with the [National Institutes of Health] all the way from early development through clinical trials and now manufacturing, with the potential to bring millions of safe and effective doses to the American people."

Moderna is currently evaluating mRNA-1273 in a phase 3 trial. Roughly 30,000 people will participate in the study, which is designed to test the drug's safety and efficacy against COVID-19. Health officials say the results of the trial could come as early as November.

Moderna's stock jumped 8% in pre-market trading on the news.


Joe Tenebruso has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

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