U.S. to pay Pfizer $1.95 billion to produce millions of doses of COVID-19 vaccine

(Reuters) – The U.S. government will pay $1.95 billion to buy 100 million doses of Pfizer Inc (PFE.N) and German biotech firm BioNTech SE’s (22UAy.F) COVID-19 vaccine candidate if they are able to successfully develop one, the companies said on Wednesday.

FILE PHOTO: The logo of U.S. pharmaceutical corporation Pfizer Inc. is seen at a branch in Zurich, Switzerland October 2, 2018. REUTERS/Arnd Wiegmann

Pfizer said they will not receive any money from the government unless the vaccine is deemed to be safe and effective and is successfully manufactured.

The agreement allows the U.S. government to acquire an additional 500 million doses, the Department of Health and Human Services (HHS) and the Department of Defense said.

HHS said the vaccine will be made available to Americans at no cost, although their health insurance may be charged.

In clinical trials, Pfizer and BioNTech have been testing vaccines that require two injections. That means a supply of 100 million doses would likely vaccinate 50 million Americans.

The Trump administration has agreed to spend billions of dollars for the development and procurement of potential vaccines. The administration launched Operation Warp Speed — a joint HHS and Department of Defense program — to accelerate the development of coronavirus vaccines, treatments and diagnostics.

More than 150 coronavirus vaccines using a variety of technologies are in development globally, with some two dozen already in human trials. Governments have signed deals with drugmakers to secure the supply of various vaccine candidates.

Pfizer and BioNTech’s vaccine candidate is among those that are set to be tested in a large trial. The vaccine has shown promise in early-stage small studies in humans.

Pfizer will deliver the doses if the product receives emergency use authorization or licensing from the U.S. Food and Drug Administration, after demonstrating safety and efficacy in a large Phase 3 clinical trial.

The companies said they expect to be ready to seek some form of regulatory approval as early as October if the ongoing studies are successful.

Pfizer and BioNTech currently expect to manufacture up to 100 million doses globally by the end of 2020, and potentially more than 1.3 billion doses by the end of 2021, subject to final dose selection from their clinical trial.

Pfizer’s shares rose 4%, while BioNTech’s U.S.-listed shares were up about 6% before the bell.

Reporting by Ankur Banerjee in Bengaluru; Editing by Shounak Dasgupta