The U.S. government bought 100 million doses of mRNA-1273 from Moderna Inc., of Cambridge, Mass., with a new award worth up to $1.525 billion, a deal that drops the implied cost per dose below that of several other companies receiving funding through the government program.

Moderna’s implied cost per dose of $15.25 is below three other deals. Analyst SVB Leerink notes that a $15 to $20 range per dose is within its expectations and is an important benchmark.

Other U.S. government deals, through Operation Warp Speed (OWS), have been cut with Pfizer Inc.-Biotech SE, Astrazeneca plc, Novavax Inc., Janssen Pharmaceutical Cos. and Sanofi SA-Glaxosmithkline plc (GSK).

The July 31 Sanofi-GSK deal brought in $2.1 billion to produce 100 million doses of a vaccine, with an implied price of $21 per dose. It’s the biggest OWS deal so far. The candidate is based on the recombinant protein-based technology used by Sanofi to produce an influenza vaccine combined with GSK’s pandemic adjuvant technology. Sanofi, leading the clinical development and registration, said it expects a phase I/II trial to begin in September and a phase III by year-end. The U.S. government has an option for ordering another 500 million doses. Sanofi and GSK envision potentially producing 1 billion doses annually. If the data are positive, the companies can request U.S. regulatory approval in the first half of 2021.

Pfizer-Biontech received $1.95 billion on July 22 from OWS for the first 100 million doses of their jointly developed mRNA-based COVID-19 vaccine by October, with an implied price per dose of $19.50. The agreement includes the government’s option to buy as many as 500 million additional doses. The companies said they could potentially manufacture more than 1.3 billion doses by the end of 2021.

Novavax’s July 7 deal calls for 100 million doses that OWS paid $1.6 billion for, with an implied price per dose of $16 per dose. Preclinical data showed NVX-CoV2373 demonstrated an indication of antibodies to block binding of spike protein to receptors that are targeted by the virus. Novavax already has its phase I/II trial of NVX-CoV2373 going in Australia.

Janssen received more than $1 billion to produce 100 million doses of Ad26.COV2.S, with an implied price of about $10 per dose. The vaccine will be provided at a global not-for-profit basis for emergency pandemic use, the company said. The U.S. government also has the option to purchase another 200 million doses of Ad26.COV2.S under a subsequent agreement.

Astrazeneca’s OWS deal is the outlier. It is for producing 300 million doses of AXD-1222, which the government paid $1.2 billion for, with an implied price per dose of $4 each. It was not disclosed why the cost is so much less than the others. The deal’s call for 300 doses differs dramatically from the other agreements for 100 doses. Astrazeneca’s candidate, AZD-1222, was developed by the University of Oxford in the U.K. and licensed to Astrazeneca, whose platform supports large-scale production.

SVB Leerink analyst Mani Foroohar wrote Wednesday morning that Moderna’s lower price point and risk-sharing with the U.S. government was “further evidence of competitive intensity in the SARS-CoV-2 vaccine market driving price erosion” and consistent with Moderna’s previous commentary that “larger government contracts would be priced materially lower than the $32-37/dose disclosed for initial supply agreements at smaller volumes.”

Foroohar is referencing Moderna’s CEO and director, Stéphane Bancel, who spoke about the impact of production volume during the company’s Aug. 5 conference call with investors.

Stéphane Bancel, CEO, Moderna

“During the pandemic period, we are priced well below value with pre-approval supply agreements mostly to governments,” Bancel said. “To date, smaller volume agreements have been executed between $32 and $37 per gross. Larger volume agreements under discussion will be at a lower price for higher volumes. In the endemic period, pricing considerations will follow traditional dynamics and market forces, including vaccine efficacy and the competitive landscape. We will look to price in line with other innovative commercial vaccines. We expect traditional approaches to vaccine purchase and distribution in the endemic phase.”

H.C. Wainwright & Co. analyst Robert Burns wrote Wednesday that while Moderna’s implied price per dose of $15.25 appears less than Pfizer-Biontech’s $19.50 implied price per dose for BNT-162, he reminded investors that Moderna previously received $955 million in federal funds from the U.S. Biomedical Advanced Research and Development Authority to develop mRNA-1273.

“We believe that the price per dose implied in the U.S. government contract clearly dovetails with our previous commentary indicating that Moderna's stated intent to price its vaccine in the $50-$60 range per dose would likely not be achievable,” Burns added.

On July 22, Burns wrote that a $19.50 per dose figure is roughly in line with the CDC’s estimate of $16 to $25 for an influenza shot.

The Moderna deal also brings the U.S. government an option to buy up to an additional 400 million doses and brings the U.S. government’s investment in the MRNA-1273 vaccine to about $2.48 billion. Moderna was awarded $483 million in April and another $472 million in July.

On July 27, Moderna dosed the first of what could be as many as 30,000 healthy volunteers as it began its phase III COVID-19 vaccine trial. Those volunteers at increased risk of contracting COVID-19, with a large percentage being elderly or people with co-morbidities – those most at risk for life-threatening COVID-19 infections – are receiving placebo or mRNA-1273.

According to Pfizer and Biontech, Americans will not be charged to receive their vaccine. Some companies have committed to providing their vaccines, once approved, at cost. Others said they would make a vaccine available at “not-for-profit pricing.” A few have said their vaccines will be “reasonably priced.” Astrazeneca and Janssen said their vaccines would sell for the production cost.