U.S. pledges $2.1 billion for up to 600 million doses of Sanofi, GlaxoSmithKline vaccine

July 31, 2020, 11:45 AM UTC

The Trump administration will provide as much as $2.1 billion to Covid-19 vaccine partners Sanofi and GlaxoSmithKline Plc, the biggest U.S. investment yet in fast-tracking shots and snapping up supplies.

Part of Operation Warp Speed, the funding will support clinical trials and manufacturing while allowing the U.S. to secure 100 million doses of the shot, if it’s successful, the companies said Friday. The country has an option to receive an additional 500 million doses longer term.

Glaxo shares traded 0.6% higher in London, with Sanofi up 1.3% in Paris.

The deal follows billions of dollars of U.S. commitments to other experimental vaccines—all still needing to show their effectiveness in testing—and may stoke concerns that other countries will be left behind. Vaccines are seen as the key to leading the world out of the pandemic that has killed about 675,000 people in a matter of months.

Sanofi and Glaxo, two of the world’s biggest vaccine makers, signed a similar deal earlier this week with the U.K. government, which has also raced to lock up supplies. The companies are in talks with global organizations and the European Union, and said they plan to provide a significant portion of capacity in 2021 and 2022 to an initiative focused on accelerating development and production worldwide and deploying shots equitably.

Supplies Likely Limited

The challenges and stakes in getting a vaccine to the world are huge.

If any vaccines succeed in the coming months, supplies are likely to be limited, making it difficult to immunize global populations and halt the virus’s spread. The World Health Organization, the Coalition for Epidemic Preparedness Innovations, and Gavi, the Vaccine Alliance outlined an $18 billion plan in June to roll out shots and secure 2 billion doses by the end of 2021.

Sanofi plans to start a study compressing the early and middle stages of clinical tests in September, followed by a final-stage study by the end of 2020. If the results are positive, the companies can seek U.S. regulatory approval in the first half of 2021, they said Friday. Their vaccine candidate is based on technology Sanofi uses to make influenza vaccine and Glaxo’s adjuvants, which enhance the body’s immune response.

Increased Odds

Sanofi and Glaxo are following a number of other developers in the coronavirus vaccine race. The University of Oxford and partner AstraZeneca Plc, Moderna Inc. and Pfizer Inc. are among the leaders in the sprint to deliver a shot. Pfizer and partner BioNTech SE said Friday that they’ll supply 120 million doses of their vaccine to Japan in the first half of 2021.

The U.S. has sealed agreements with a number of these developers. Pfizer and BioNTech last week reached a $1.95 billion deal to supply their coronavirus vaccine to the government, while Novavax Inc., which has yet to commercialize a medicine or vaccine, earlier this month announced a $1.6 billion deal. The U.S. also pledged as much as $1.2 billion to AstraZeneca.

Operation Warp Speed seeks to telescope a process that typically takes years into just months. The drive is being led by General Gustave Perna, who directs the U.S. Army Materiel Command, and former Glaxo executive Moncef Slaoui.

The program “increases the odds that we will have at least one safe, effective vaccine as soon as the end of this year,” Health and Human Services Secretary Alex Azar said in the statement.

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