Pfizer, BioNTech Reach $1.95 Billion Coronavirus Vaccine Deal With US Government

Pfizer (PFE) and BioNTech (BNTX) reached agreement with the U.S. government Wednesday to produce 300 million doses of a COVID-19 vaccine in 2021. The agreement provides that a third of the production will go to the United States if the vaccine is approved by the Food and Drug Administration.

The FDA fast-tracked two of the four vaccines being developed by the two companies earlier this month after studies indicated they showed promise in boosting the immune system to fight off attempted infection by the coronavirus, which has affected nearly 15 million people worldwide, more than 3.9 million in the U.S. The agreement covers the vaccine labeled BNT162b1.

The $1.95 billion deal covers the first 100 million doses and provides for the U.S. to be able to acquire 500 million more doses.

“We’ve been committed to making the impossible possible by working tirelessly to develop and produce in record time a safe and effective vaccine to help bring an end to this global health crisis,” Pfizer Chairman and CEO Dr. Albert Bourla said in a press release.

Bourla said manufacture of the vaccine already is underway.

“Depending on success in clinical trials, today’s agreement will enable the delivery of approximately 100 million doses of this vaccine to the American people,” U.S. Health and Human Services Secretary Alex Azar said.

The vaccine is based on BioNTech’s mRNA technology. Phase 3 trials are set to get underway shortly, enrolling 30,000 people worldwide. Early data indicated the vaccine revved up immunity, getting the body to produce “neutralizing antibodies in humans at or above levels observed in plasma from patients who have recovered from COVID-19” at what the companies described as low dose levels. The companies said no “serious adverse events” were reported.

BioNTech cofounder and CEO Ugur Sahin said the company also is in talks with other governments and expects to announce further agreements soon.

“If the ongoing studies are successful, Pfizer and BioNTech expect to be ready to seek Emergency Use Authorization or some form of regulatory approval as early as October 2020,” the press release said. “The companies currently expect to manufacture globally up to 100 million doses 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.”

Also in phase 3 clinical trials is a vaccine under development by AstraZeneca (AZN) and Oxford University in England. Moderna (MRNA) also has an mRNA vaccine candidate that has shown promising results in early trials. Worldwide, some 150 vaccines are under development.

At the open, Pfizer was up about 3.5%, trading around $38 a share. BioNTech was up more than 4%, trading at more than $95 a share.