US, Johnson & Johnson Agree To $1 Billion Deal To Demonstrate COVID-19 Vaccine Production

The U.S. government has agreed to a $1 billion deal with the Jassen Pharmaceutical Companies of Johnson & Johnson (JNJ) to demonstrate large-scale manufacturing and delivery of its COVID-19 vaccine.

The contrac between the company and the U.S. Department of Health and Human Services and the Department of Defense will provide the federal government with 100 million doses of Johnson & Johnson’s COVID-19 vaccine. The deal includes an option for the U.S. government to obtain another 300 million doses of the COVID-19 vaccine from the pharmaceutical company.

Through the partnership, the vaccine could be used in clinical trials or distributed as part of a COVID-19 vaccine campaign once approved by the U.S. Food and Drug Administration.

The government said the vaccine project will demonstrate the manufacturing process while clinical trials are underway to expedite the development timeline of the vaccine under its Operation Warp Speed. Operation Warp Speed is the government’s program to speed up the delivery of millions of doses of a safe and effective vaccine by the end of 2020.

The demonstration project will also include fill-finish manufacturing in U.S.-based facilities to ensure the vaccine doses are packaged and ready to ship immediately. The vaccine may also be made available to Americans at no cost if they are not used in a COVID-19 vaccine campaign, the agencies said.

“With the portfolio of vaccines being assembled for Operation Warp Speed, the Trump Administration is increasing the likelihood that the United States will have at least one safe, effective vaccine by 2021,” HHS Secretary Alex Azar said in a statement. “Today’s investment represents the next step in supporting Janssen’s vaccine candidate all the way through manufacturing, with the potential to bring hundreds of millions of safe and effective doses to the American people.”

The deal with Johnson & Johnson comes a day after U.S. biotech company Novavax announced that its COVID-19 vaccine, funded by the U.S. government in July, was producing a robust immune response. The company said the vaccine is producing more antibodies with generally tolerable side effects in early-stage clinical trials.

Novavax was given $.16 million under the federal government’s Operation Warp Speed program for the development of the vaccine. Johnson & Johnson has received about $456 million for clinical trials and other vaccine development activities under the Biomedical Advanced Research and Development Authority.

Shares of Johnson & Johnson were trading at $148.10 as of 11:14 a.m. ET, up 88 cents or 0.60%.