The Trump administration has canceled a major federal contract awarded to Moderna for the development of its mRNA-based bird flu vaccine, halting late-stage progress on a key pandemic preparedness initiative.

The company announced Wednesday that the cancellation also includes the government’s right to purchase doses, effectively ending its support for the H5N1 vaccine program.

The move scraps more than $700 million in combined funding, including $590 million awarded by the Biden administration in January and an additional $176 million granted in 2023 by the Department of Health and Human Services (HHS).

The funds were intended to accelerate late-stage development, testing, and expansion of clinical studies across multiple avian influenza subtypes.

HHS says Moderna project failed to meet scientific standards

An HHS spokesperson stated that the cancellation followed a “comprehensive internal review,” which concluded the project did not meet the agency’s safety or scientific benchmarks for continued investment.

The Trump administration's decision reflects a significant shift in vaccine strategy, especially when compared to the aggressive federal funding model used during Operation Warp Speed to combat COVID-19.

“The cancellation means that the government is discarding what could be one of the most effective and rapid tools to combat an avian influenza outbreak,” said Amesh Adalja, senior scholar at the Johns Hopkins Center for Health Security.

Moderna to pursue bird flu vaccine development independently

In response, Moderna said it still plans to pursue alternative pathways for late-stage development and manufacturing of its H5N1 bird flu vaccine, a key part of the company’s post-pandemic mRNA revenue strategy. Shares of Moderna remained flat in after-hours trading following the announcement.

The vaccine is being developed as a response to rising global concern over H5N1 bird flu transmission, which has infected at least 70 people, primarily farm workers, over the past year amid widespread outbreaks in cattle and poultry.

Health Secretary Robert F. Kennedy Jr., who has drawn criticism for his vaccine skepticism, previously suggested that poultry farmers should allow bird flu to spread through their flocks to observe natural resistance. His comments sparked backlash from lawmakers and health experts alike.

Despite the loss of federal funding, Moderna reported positive interim results on Wednesday from a mid-stage trial assessing the safety and immunogenicity of its H5N1 vaccine candidate.

The company also continues development on an experimental COVID-flu combination vaccine, part of its broader strategy to stabilize revenue following declining demand for standalone COVID-19 vaccines.