Fax makers including Moderna must meet US timing targets for full payments

NEW YORK (Reuters) – US binds payments for COVID-19 faxes to timing miles for production and approval, according to public documents and an official from the Trump administration, putting pressure on drugmakers including Moderna Inc (MRNA.O) to meet ambitious goals.

In a deal with Moderna announced this week, federal agencies are negotiating a shift scale of payments. The Cambridge, Massachusetts, biotech $ 1.5 billion deal will pay off in full if its fax is regulated by January 31, 2021, according to filings. It will receive $ 1.2 billion if it falls short of that timing target.

Moderna will also receive $ 600 million if it can prove that it has built industrial-scale manufacturing plants for its vaccine, even if that happens before the drug is authorized by regulators, the filings show.

Payments by the U.S. government to other drugmakers are also conditional on launching clinical trials no later than early fall and building production facilities by the end of the year, two administration officials told Reuters, adding that conditions per company differ.

The deal provisions add financial risk to the drug makers and increase the pressure for speed that has caused some public health advocates. HHS and Moderna declined to comment; other drugmakers had no immediate comment Friday.

Other drugmakers did not disclose details about the specific terms of their agreements with the U.S. government, although Pfizer said its deal with the government for its joint vaccine with BioNTech will only pay off if it receives regulatory approval.

The United States has allocation agreements with Johnson & Johnson (JNJ.N), Pfizer Inc (PFE.N), BioNTech SE (22UAy.F), Sanofi SA, and GlaxoSmithKline Plc (GSK.L). It also has a claim for 300 million doses of AstraZeneca Plc vaccine in exchange for funding its research and development efforts.

Analysts have already said that drug makers are struggling to recover billions invested in vaccine development at US treatment rates that have so far ranged from $ 20 to $ 42 per person.

Administration officials have said they expect the U.S. government’s vaccine development program ‘Warp Speed’ to deliver an inoculation by the end of the year. President Donald Trump has said he thinks a fax could be available for the November 3 presidential election.

To get approval of the rule, a vaccine must reduce incidents of infection with the new coronavirus by 50 percent compared to people who are not inoculated and prove a high level of safety.

Experts say ongoing vaccine studies, which will require tens of thousands of people to register and wait until they are exposed to the coronavirus, could produce useful results as early as mid-2021, raising questions about drug makers’ ability to meet administration timelines satisfy.

Shares of Moderna have more than tripled since it was announced in January that it was a fax. Moderna has never produced an approved vaccine.

But the U.S. government’s implied payment per course of treatment for Moderna’s medication, $ 30.50, could decrease to $ 24.50 if it does not receive approval for its vaccine by January 31, 2021.

The United States has raised about $ 8 billion through its Operation Warp Speed ​​vaccine development program to include deals for COVID-19 vaccines before one of them gets regulatory approval.