Pfizer Inc PFE is nearing a deal with the outgoing President Donald Trump's administration to supply 100 million doses of its coronavirus vaccine to the United States, the Wall Street Journal reported Tuesday.
What Happened: The U.S. government would pay Pfizer $2 billion as per the terms of the deal, under consideration, and the drugmaker would provide the vaccine doses by July, people familiar with the matter told the Journal. An agreement is expected Wednesday.
The government is reportedly demanding 100 million additional doses from Pfizer from April through June, while the New York-based pharmaceutical multination says it should be able to make at least 70 million, and likely more, should it get access to raw materials, the New York Times reported earlier.
The agreement between the drugmaker and the government involves giving Pfizer access to nine specialized products needed to make the vaccine by the way of invoking the Defense Production Act.
Why It Matters: Pfizer’s vaccine — developed in partnership with Germany’s BioNTech SE BNTX — is only one of the two vaccines approved by the United States Food and Drug Administration besides the one made by Moderna Inc MRNA, which reportedly gave the drugmaker an advantage in negotiations.
The advantage could dissipate as Johnson & Johnson JNJ releases results from clinical trials in January, noted the Times.
While Johnson & Johnson and Moderna are a part of Operation Warp Speed, Pfizer has opted to stay out. The company’s CEO Albert Bourla said “Our independence is a precious asset on declining government funding.
The supply of both approved vaccines, even after taking into consideration additional 100 million doses from Pfizer, would leave 60 million Americans uncovered in the first half of 2021, as per the Times.
Price Action: Pfizer shares closed 1.71% lower at $36.74 on Tuesday and gained 0.22% in the after-hours session.
Related Link: Pfizer, Moderna Opt Out Of White House Vaccine Summit: Report
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